Bitwise Spot Bitcoin ETF Approval Delayed; SEC Seeks Public Comments

The Securities and Exchange Commission (SEC) has delayed a decision on whether to allow the listing of a spot Bitcoin exchange-traded fund by Bitwise Asset Management and sought further clarification from the company.

According to a notice to the company Tuesday, the SEC asked Bitwise to clarify how the firm will prevent share manipulation, fraud and other potential issues in its proposed spot Bitcoin ETF.

"What are commenters’ views generally on whether the exchange’s proposal is designed to prevent fraudulent and manipulative acts and practices?" the notice read.

The agency also raised concerns about Bitcoin ETP Trust's liquidity and transparency and requested more details on the "suitability" of Bitcoin.

"What are commenters’ views generally with respect to the liquidity and transparency of the Nitcoin markets’ susceptibility to manipulation, and thus the suitability of Bitcoin as an underlying asset for an exchange-traded product (“ETP”)?"

The delay came after the SEC denied spot Bitcoin ETFs by several issuers in recent times, including Fidelity, SkyBridge and Valkyrie.

As of 1.30 a.m. ET, Bitcoin was trading at $38,469.16. The top coin had touched its record high of around $69,000 in November.

The SEC has asked any interested parties to send comments on certain parts of the ETF application.

In December, the SEC rejected investment firm Kryptoin’s proposal for a spot Bitcoin ETF after evaluating it for over eight months. The decision came as no surprise though as SEC Chair Gary Gensler had made clear his preference for a Bitcoin futures ETF to an ETF that holds Bitcoin itself.