Ever since the energy issues and the potential of fraud start to reveal in bitcoin, agencies around the world have been on the fence about its utilities. Recently, the US Securities and Exchange Commission (SEC) rejected One River Digital’s proposal for a Bitcoin ETF – Exchange Traded Fund that allows one to buy carbon credits.
SEC didn’t waste any time in coming up with this decision. Having extended the deadline to reach the final decision by June 2, the Securities Exchange Commission instead decided to squash any hopes of a Carbon Neutral Bitcoin ETF ahead of schedule.
A Move Motivated by Fraud and Manipulations Concerns
One River was hoping to get approval from SEC to offer the Carbon Neutral Bitcoin Trust on New York Stock Exchange Arca.
The proposal, however, was found to have less than optimal protection against fraud and manipulations, something that has been a running theme in most ETC proposals SEC has received.
The Commission noted that the proposed rule change that One River forwarded uses the same standard as the previous proposals that wanted to list Bitcoin-based commodity trust. With that, the SEC clarified that the proposed rule fails to meet the regulator’s fraud prevention standard. Adding further, SEC stated that analyzing the value of blockchain technology or bitcoin was not the reason behind the rejection.
One River Digital is the brainchild of Eric Peters, founder of One River Asset Management. Launched in 202, One River Digital has received substantial backing from reputed investors, including the likes of Alan Howard, Co-Founder of Brewan Howard Asset Management and a billionaire.
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All Bitcoin-ETFs Rejected
One River’s digital is not the first bitcoin ETF to be rejected; it is just the latest one. Many organizations have before tried to submit the proposals for their versions of Bitcoin-ETF – US SEC has rejected all of them. These organizations include Fidelity Investments, Global X, Skybridge Capital and New York Digital Investment Capital.
While most of them have stepped a bit after not getting SEC’s approval, digital asset manager Grayscale is much more aggressive – going as far as threatening SEC with a lawsuit if the application is not considered. The asset manager is also rallying people on social media to stand behind its application.
One River submitted the One River Carbon Neutral Trust Proposal in May 2021, but public records say they made some changes and resubmitted the proposal four months later.
Many have said that bitcoin-ETF is a bad way to enter the crypto market. Reasons like enormous trading and high expense ratios that lower the ETF investment returns have been cited as reasons not yet to get excited about the Bitcoin ETF.
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