Bitcoin falls on SEC report of inadequate spot BTC ETF filings.

The U.S. Securities and Exchange Commission (SEC) has stated that recent filings for the launch of a spot bitcoin exchange-traded fund (ETF) are insufficient, according to sources familiar with the matter, as reported by the Wall Street Journal on Friday morning.

This news caused the price of bitcoin (BTC) to drop by $1,000, or over 3%, in just a few minutes. As of now, bitcoin is trading slightly above $30,000.

According to the report, the SEC has informed Nasdaq and CBOE, the exchanges that submitted the spot ETF applications on behalf of various asset managers, including BlackRock (BLK) and Fidelity, that the applications lack clarity and comprehensiveness.

The issue lies in the fact that the filings did not provide enough detail regarding the “surveillance-sharing agreements,” particularly which spot bitcoin exchange would be utilized. The asset managers have the option to update and resubmit their applications, and the CBOE has expressed its intention to do so, as stated by the Wall Street Journal.

One of the main reasons for the SEC’s previous rejections of all spot bitcoin ETF filings was its concern about price manipulation. The surveillance-sharing agreements in these new applications were intended to address those concerns.

“We cannot comment on individual filings,” said an SEC spokesperson when approached by blockchain.

BlackRock’s spot ETF filing in mid-June sparked a significant increase in the price of bitcoin, propelling the cryptocurrency from below $26,000 to one-year highs above $31,000. This filing also triggered a wave of submissions from other asset managers, including Invesco (IVZ) and Fidelity, both of which reapplied for approval of their previously rejected spot bitcoin ETFs.

Representatives from BlackRock, Fidelity, and Invesco all declined to comment when approached by blockchain.

Updated (15:02 UTC, June 30, 2023): Additional context has been provided.