The Securities and Exchange Commission (SEC) has postponed a decision on whether to approve the first Bitcoin exchange traded fund (ETF), the regulator said on Thursday.
The SEC has delayed a decision on VanEck’s planned Bitcoin product for the second time since April, when it said it needed more time to study the proposal. On Wednesday, the regulator postponed its decision again, this time asking for more comments on whether the product should be allowed to trade on public markets.
The SEC needs to know whether the proposed ETF is vulnerable to manipulation and if any single market participant would be able to “buy or sell large amounts of bitcoin without significant market impact,” according to the press release.
Why has the SEC refused to approve another ETF?
It was predicted that SEC Chair Gary Gensler, who had lectured on digital assets at the Massachusetts Institute of Technology (MIT), would be more open-minded. However, since he took office in April, the agency has continued to express concern about the lack of oversight of cryptocurrency exchanges. It has also issued new warnings about the risks of investing in mutual funds that invest in Bitcoin futures.
The SEC has received a dozen bitcoin ETF proposals over the past eight years, but has not approved any of them due to investor protection concerns. In recent months, the regulator also delayed decisions on ETFs proposed by Kryptoin and WisdomTree.