SEC Denies NYSE Arca Rule Change for Spot Price Bitcoin ETF

As the SEC continues to examine cryptocurrency related products, the Commission denied a requested rule change by NYSE Arca to list and trade shares of a proposed carbon-neutral spot bitcoin exchange-traded fund, the One River Carbon Neutral Bitcoin Trust. The SEC’s order noted the burden of demonstrating sufficient investor protection was not met. In particular, the SEC stated that NYSE Arca failed to uphold the requirements of Exchange Act Section 6(b)(5), that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” The SEC continues to monitor the bitcoin spot market and remains hesitant to approve spot price-based ETF product. The SEC previously approved bitcoin futures ETFs because those funds hold their exposure through a regulated futures market which the SEC has regulatory experience with.