The US SEC rejects the reliability of Valkyrie, Kryptoin bitcoin by Reuters

By Hannah Lang and Katanga Johnson

(Reuters) – The US Securities and Exchange Commission has rejected two proposals to offer funds traded on bitcoin in exchange, after approving bitcoin-backed funds in the future in October.

In a note on Wednesday, the market regulator said both proposals to list and trade shares in the Valkyrie Fund and the Kryptoin Bitcoin ETF Trust were not accepted because they did not meet its standard.

“(These proposals) do not meet the standard designed to prevent fraudulent and manipulative actions and practices and to protect investors and the public interest,” the SEC said.

The SEC approved two bitcoin-based funds in October, the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, which launched on Wall Street the same month.

However, the regulator has not yet approved the application for a bitcoin spot ETF. Last month, the SEC rejected an application to create a VanEck spot bitcoin fund, and on Dec. 17, it delayed a decision on a similar proposal by the Grayscale Bitcoin Trust.

ETFs are investment tools that track stock baskets and have become known for lower fees. A Bitcoin ETF, which exposes you to digital currency, aims to save you the hassle of buying a cryptocurrency and managing your private keys.

Industry groups and stock markets have long sought SEC approval for these products.

SEC Democrat President Gary Gensler and investor advocates, however, are concerned that they see a lack of regulatory oversight and oversight that increases the potential for fraud and manipulation.