The U.S. Securities and Exchange Commission (SEC) has rejected the Wisdom Tree Bitcoin Trust ETF, as it has no valid measure to protect investors against market manipulation.
The SEC in an Oct. 11 release noted that it had to reject the filing by BZX Exchange, as the bitcoin-ETF issuer does not have a significant surveillance sharing agreement with a regulated market for bitcoin.
A surveillance-sharing agreement allows market participants to easily share market trading and clearing activist and customer identity in the event of any price manipulation of BTC.
According to the SEC, the surveillance agreement is crucial before it can approve any spot bitcoin-ETF, given that the market for bitcoin is highly unregulated.
The first Wisdom Tree spot bitcoin ETF was also rejected in December 2021 on grounds of investor protection.