U.S. SEC Rejects Carbon-Neutral Bitcoin ETF by One River

The U.S. Securities and Exchange Commission (SEC) has maintained its position on Bitcoin spot exchange-traded fund (ETF) applications after rejecting One River Digital’s application to offer the One River Carbon Neutral Bitcoin Trust on the New York Stock Exchange Arca on Friday.

In its decision, the SEC stated that it applied “the same standard used in its orders considering previous proposals to list bitcoin-based commodity trusts,” and that the proposed rule change by One River did not meet its rules around fraud prevention.

“[…] disapproval of this proposed rule change does not rest on an evaluation of whether bitcoin or blockchain technology, more generally, has utility or value as an innovation or an investment,” the SEC clarified.

One River Digital, launched in 2020 by Eric Peters, is reportedly backed by Alan Howard, co-founder of Brevan Howard Asset Management. The hedge fund now joins a growing list of other financial organizations that have tried and failed to move forward with the SEC.

SEC and Bitcoin ETFs

SEC’s decision to reject the application is not entirely surprising given that several institutions have applied for the approval but their applications were also rejected.

Some of these firms include New York Digital Investment Group (NYDIG), Skybridge, Global X, and Fidelity Investments. In most cases, the Commission has insisted that it has rejected the spot Bitcoin ETF applications due to concerns about manipulation and fraud.

Back in April, the SEC rejected Ark 21Shares joint application – a collaboration between Wall Street titan Cathie Wood’s Ark Investment Management and investment firm 21Shares, filed on behalf of Cboe BZX Exchange. The SEC said that BZX didn’t meet the requirements of investor protection, as it didn’t meet the burden required under the Exchange Act.

Last month, Grayscale Investments, whose ETF application has been pending with the SEC since early 2017, met with the watchdog to continue its efforts in meeting the compliance requirement for turning its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF.

“At Grayscale, we intend to maintain an open dialogue with regulators and policymakers as we look ahead to July 6,” a Grayscale spokesperson said in an interview.

In its presentation to the SEC, Grayscale said that converting its marquee product into an ETF would “protect investors and the public interest, allowing the product to better track net asset value while giving investors the freedom to invest in Bitcoin in a safe and secure manner.”

The deadline for the SEC to approve or reject Grayscale’s application is July 6. Back in February, the SEC said it received close to 200 letters pushing for it to approve Grayscale’s application, in response to a public campaign launched by the digital asset manager.

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