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The U.S. Securities and Exchange Commission (“SEC”) has said that the applications filed by BlackRock, Inc. (BLK - Free Report) and other asset managers for a spot bitcoin exchange traded fund (“ETF”) are inadequate. The news was first reported by the Wall Street Journal, citing people familiar with the matter.
Exchanges like Nasdaq and Cboe Global Markets, which filed the spot ETF paperwork for BlackRock, Fidelity Investments and a few other asset managers have been informed that the applications were not sufficiently clear and comprehensive.
Reportedly, the filings did not have enough detail with respect to the “surveillance-sharing agreements.”
Nevertheless, the asset managers have the option to update their applications and refile for the spot ETF.
Last month, BLK became the first asset manager to file for a spot bitcoin ETF, paving the way for a wave of filings by other asset managers like Fidelity, Invesco (IVZ - Free Report) and WisdomTree (WT - Free Report) .
The applications came at a time when the cryptocurrency industry was already battling criticism by the SEC over alleged securities law violations.
Coinbase and the world’s largest crypto exchange, Binance, were sued by the SEC, alleging securities violations.
Thus, the SEC proposed new custody rules that would place additional responsibilities on asset managers to make sure that customers’ assets are kept in properly segregated accounts.
Earlier, proposals by asset managers have been rejected by the SEC on the belief that the tokens trade on unregulated exchanges with surveillance and manipulation risks.
In October 2021, IVZ withdrew its original application for a bitcoin ETF (made earlier in 2021) because of regulatory headwinds within the industry. At that time, the SEC was resistant in approving such funds due to concerns over potential fraud and market manipulation.
Likewise, in October 2022, WT’s application for the launch of the WisdomTree Bitcoin Trust was not approved by the SEC on account of insufficient investor protection.
However, the fact that these asset managers are still filing for the spot bitcoin ETC shows that they want to enter the battered cryptocurrency markets again, signaling a shift in the regulatory landscape.
Over the past six months, shares of BLK have lost 4.2% against the industry’s 3.9% rise.
Image Source: Zacks Investment Research
Currently, BlackRock carries a Zacks Rank #4 (Sell).
Image: Bigstock
BlackRock (BLK), Others' Bitcoin ETF Filing Viewed Inadequate
The U.S. Securities and Exchange Commission (“SEC”) has said that the applications filed by BlackRock, Inc. (BLK - Free Report) and other asset managers for a spot bitcoin exchange traded fund (“ETF”) are inadequate. The news was first reported by the Wall Street Journal, citing people familiar with the matter.
Exchanges like Nasdaq and Cboe Global Markets, which filed the spot ETF paperwork for BlackRock, Fidelity Investments and a few other asset managers have been informed that the applications were not sufficiently clear and comprehensive.
Reportedly, the filings did not have enough detail with respect to the “surveillance-sharing agreements.”
Nevertheless, the asset managers have the option to update their applications and refile for the spot ETF.
Last month, BLK became the first asset manager to file for a spot bitcoin ETF, paving the way for a wave of filings by other asset managers like Fidelity, Invesco (IVZ - Free Report) and WisdomTree (WT - Free Report) .
The applications came at a time when the cryptocurrency industry was already battling criticism by the SEC over alleged securities law violations.
Coinbase and the world’s largest crypto exchange, Binance, were sued by the SEC, alleging securities violations.
Thus, the SEC proposed new custody rules that would place additional responsibilities on asset managers to make sure that customers’ assets are kept in properly segregated accounts.
Earlier, proposals by asset managers have been rejected by the SEC on the belief that the tokens trade on unregulated exchanges with surveillance and manipulation risks.
In October 2021, IVZ withdrew its original application for a bitcoin ETF (made earlier in 2021) because of regulatory headwinds within the industry. At that time, the SEC was resistant in approving such funds due to concerns over potential fraud and market manipulation.
Likewise, in October 2022, WT’s application for the launch of the WisdomTree Bitcoin Trust was not approved by the SEC on account of insufficient investor protection.
However, the fact that these asset managers are still filing for the spot bitcoin ETC shows that they want to enter the battered cryptocurrency markets again, signaling a shift in the regulatory landscape.
Over the past six months, shares of BLK have lost 4.2% against the industry’s 3.9% rise.
Image Source: Zacks Investment Research
Currently, BlackRock carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.