The U.S. Securities and Exchange Commission (SEC) has said recent applications by asset managers to launch spot bitcoin exchange-traded funds (ETFs) were not sufficiently clear and comprehensive, a source familiar with the matter said.
The SEC has communicated its concerns to the exchanges Nasdaq (NDAQ.O) and Cboe Global Markets (CBOE.Z) which filed the applications on behalf of asset managers including BlackRock (BLK.N) and Fidelity, the source added on Friday.
The SEC, Fidelity, BlackRock and Nasdaq declined to comment on the report, while Cboe was not immediately available.
The ETF filings by such major firms had sparked renewed investor hopes that a bitcoin ETF would finally be approved by the SEC, and revived interest in cyptocurrencies, which have been hit by a series of crypto company meltdowns including the sudden collapse of exchange FTX late last year.
In all the cases, it said the filings did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.
In a bid to address these concerns, the BlackRock and Fidelity filings proposed a surveillance mechanism aimed at preventing manipulation, but the applicants did not name which bitcoin exchange would be involved.
Blockchain-related stocks fell following the SEC's decision, with Coinbase (COIN.O), Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) between 3% and 3.7% lower.
