Spot bitcoin ETF applications found inadequate by the SEC: Report

The SEC has found that a handful of spot bitcoin ETF applications were 'inadequate', according to a report from the Wall Street Journal. Yahoo Finance Fiscal Policy Reporter Jennifer Schonberger breaks down the story.

Video transcript

SEANA SMITH: The Securities and Exchange Commission reportedly rejecting recent filings for a spot Bitcoin ETF. Bitcoin sliding on the news. Here with more on this, Yahoo Finance's Jennifer Schonberger. Jen.

JENNIFER SCHONBERGER: Hey there, Seana. Yeah, that's right. The Securities and Exchange Commission reportedly found that a handful of spot Bitcoin ETF applications just aren't adequate. "The Wall Street Journal" and Reuters are reporting that the SEC told the NASDAQ and CBOE, which have filed applications on behalf of asset managers, including BlackRock and Fidelity Investments, that their applications aren't sufficiently clear nor comprehensive.

The SEC, Fidelity, and BlackRock declined comment. Following BlackRock's lead, Fidelity Investments, Invesco, and WisdomTree were among some of the names who reactivated or amended their applications for a spot Bitcoin ETF. Several managers have filed applications with the SEC for a spot Bitcoin ETF over the past couple of years, only to find them rejected.

The SEC has argued that spot ETFs are vulnerable to fraud and market manipulation. But ETFs hold the actual underlying cryptocurrency like Bitcoin. The Commodity Futures Trading Commission has approved Bitcoin futures ETFs, which consist of future contracts that track the cryptocurrency's price and may or may not move in lockstep with the underlying asset.

Bitcoin and other crypto stocks have rallied since mid-june when BlackRock filed paperwork with the SEC, of course, not looking like the SEC may be changing its mind any time soon about these Bitcoin spot applications. Back to you.

AKIKO FUJITA: Jennifer Schonberger, thanks so much for that.