Key Takeaways
- • The U.S. Securities and Exchange Commission has asked at least one asset manager to abandon plans for a leveraged bitcoin exchange-traded fund, according to the Wall Street Journal, citing a person familiar with the matter.
- • The SEC signaled it intends to limit new bitcoin-related products to those offering unleveraged exposure to bitcoin futures contracts.
- • The guidance follows the SEC's approval of the ProShares Bitcoin Strategy ETF, the first U.S. bitcoin futures-based exchange-traded fund, which began trading the prior week.
- • The SEC did not immediately respond to a Reuters request for comment.
Summary
The U.S. Securities and Exchange Commission (SEC) has asked at least one asset manager to scrap plans for a leveraged bitcoin exchange-traded fund, the Wall Street Journal reported on Wednesday, October 27, 2021, citing a person familiar with the matter. Reuters independently reported the account, noting that the Journal's sourcing was based on a single unnamed individual.
According to the Journal, the SEC has signaled that it wants to restrict new bitcoin-related products to those providing unleveraged exposure to bitcoin futures contracts. The position indicates a more cautious regulatory stance toward leveraged crypto-linked vehicles, even as the agency has allowed futures-based products to reach market.
The development comes shortly after the SEC's approval of the ProShares Bitcoin Strategy ETF, the first U.S. bitcoin futures-based exchange-traded fund. That approval was widely viewed as a turning point for cryptocurrencies and was followed by upward movement in bitcoin prices. The ProShares fund began trading the previous week.
The SEC did not immediately respond to a Reuters request for comment. The identity of the asset manager that received the request was not disclosed in the reporting reviewed.
According to the Journal, the SEC has signaled that it wants to restrict new bitcoin-related products to those providing unleveraged exposure to bitcoin futures contracts. The position indicates a more cautious regulatory stance toward leveraged crypto-linked vehicles, even as the agency has allowed futures-based products to reach market.
The development comes shortly after the SEC's approval of the ProShares Bitcoin Strategy ETF, the first U.S. bitcoin futures-based exchange-traded fund. That approval was widely viewed as a turning point for cryptocurrencies and was followed by upward movement in bitcoin prices. The ProShares fund began trading the previous week.
The SEC did not immediately respond to a Reuters request for comment. The identity of the asset manager that received the request was not disclosed in the reporting reviewed.
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