SEC approves listing, trading spot bitcoin exchange-traded products

SEC bitcoin approval overview:

• Who: The U.S. Securities and Exchange Commission has reportedly approved 11 exchange-traded products holding bitcoin.
• Why: The SEC found the issuers had shown that they had implemented sufficient safeguards to prevent fraud and manipulation.
• Where: The SEC approved the applications for listing and trading spot bitcoin exchange-traded products.

The U.S. Securities and Exchange Commission has approved nearly a dozen exchange-traded products holding bitcoin, Law360 reports.

The Jan. 10 SEC bitcoin approval has fostered hope for industry advocates that there is growing support for the adoption of cryptocurrency in the United States.

Nasdaq Stock Market, CboeBZX Exchange and NYSE Arca submitted 19b-4 requests to the SEC to list the exchange-traded products, which the SEC granted. 

“After careful review, the Commission finds that the proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” the SEC said.

The commission later approved the requests from the products’ issuers, allowing them to begin trading on Jan. 11.

Nasdaq will reportedly list offerings from BlackRock and Valkyrie; CboeBZX will list offerings from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity and Franklin Templeton; and NYSE Arca will list offerings from Bitwise, Hashdex and Grayscale.

Commission chair cautions investors to use caution despite SEC bitcoin approval

SEC Chair Gary Gensler noted that, while the SEC approved the listing and trading of certain bitcoin shares, the commission “did not approve or endorse bitcoin.”

“Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” Gensler said in a statement.

In 2013, crypto advocates began to urge the SEC to approve a spot bitcoin exchange-traded product. Tyler Winklevoss and Cameron Winklevoss were the first to file a proposal for an exchange-traded trust holding bitcoin under the Securities Act. 

However, the SEC rejected dozens of proposals over concerns that the market for spot bitcoin was not mature enough to protect it from the potential of market manipulation.

With financial services firm BlackRock urging SEC bitcoin approval, other financial services firms began to resubmit their applications, signaling that cryptocurrency may be gaining traction as a sustainable financial product.

“We are now faced with a new set of filings similar to those we have disapproved in the past,” Gensler said. “Circumstances, however, have changed.”

Gensler says the issuers showed that they had sufficient means to prevent fraud and manipulation.

Last year, the SEC warned Coinbase that it had identified potential violations of federal security law committed by the cryptocurrency exchange.

What do you think about the SEC’s decision to approve certain exchange-traded products holding bitcoin? Tell us your thoughts in the comments.

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