Pro-Crypto Lawmaker Bashes SEC For Rejecting Fidelity’s Spot Bitcoin ETF

A pro-crypto lawmaker is furious that the U.S Securities and Exchange Commission (SEC) has refused to approve a spot bitcoin exchange-traded fund (ETF) yet again. After delaying the decision on Fidelity’s application for the Wise Origin Bitcoin Trust a couple of times, the securities watchdog has finally indicated that it is denying the proposal.

Rep.Tom Emmer, the four-term Republican member of Congress from Minnesota, described SEC’s rejection of Fidelity’s application as “baseless”.

Second Bitcoin Spot ETF Rejected By SEC This Year

The SEC has dismissed a key rule change that would let Fidelity list and trade shares of its Wise Origin Bitcoin Trust. The financial behemoth had filed paperwork with the SEC in March 2021 and was supported by the Cboe BZX Exchange.

The commission rejected the application because BZX failed to demonstrate that it could effectively prevent fraud and manipulation. Moreover, the SEC was not convinced that the exchange would protect investors and the public interest. The ruling said:

“It is essential for an exchange listing a derivative securities product to enter into a surveillance-sharing agreement with markets trading the underlying assets for the listing exchange to have the ability to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules.”

The denial was not unexpected given that SEC chairman Gary Gensler has previously indicated his preference for a bitcoin ETF backed by futures over a pure ETF that tracks the price of bitcoin itself. Last year, the agency greenlighted Bitcoin futures-based ETFs from ProShares, Valkyrie, and VanEck.

Just last week, the regulator also outrightly denied Skybridge’s Bitcoin spot ETF application, citing similar reasons for disapproving bitcoin spot ETF proposals from Fidelity today, WisdomTree in December, and VanEck in November.

While the crypto market lately could use a major bullish catalyst, it seems highly unlikely that will stem from the approval of a bitcoin spot ETF in the near future.