Dec 23 (Reuters) – The U.S. Securities and Exchange Commission vetoed two proposals to offer bitcoin exchange-traded funds, dealing a blow to market participants who had hoped the agency would green light the effort after approving futures-backed bitcoin funds in October.
In a notice dated Wednesday, the markets regulator said both of the proposals to list and trade shares of Valkyrie Bitcoin Fund and the Kryptoin Bitcoin ETF Trust failed to be approved because they did not meet its standard.
The SEC in October approved two bitcoin futures-based funds, the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, which made their Wall Street debuts the same month.
ETFs are investment tools that track baskets of stocks and have become popular due to their lower fees. A Bitcoin ETF, which provides exposure to the digital currency, aims to save the hassle of buying the cryptocurrency from an exchange and managing the private keys.
Democratic SEC Chair Gary Gensler and investor advocates, however, worry about what they see as a lack of regulatory oversight and surveillance which heightens the potential for fraud and manipulation, they have said.