- The SEC has delayed a decision on whether to approve a VanEck bitcoin ETF, it said Wednesday.
- The watchdog pushed back its ruling in late April.
- The SEC said it had outstanding questions relating to potential manipulation in the bitcoin market.
- See more stories on Insider’s business page.
The US securities regulator has delayed a decision on whether to approve a bitcoin exchange-traded fund (ETF) for a second time, due to its concerns over the potential for manipulation in the cryptocurrency market.
The Securities and Exchange Commission (SEC) had been considering a proposal from options exchange Cboe Global Markets since March to list a bitcoin ETF through asset manager VanEck Associates that would allow the world’s largest cryptocurrency to be traded among mainstream financial institutions.
The SEC first delayed its decision on VanEck’s bitcoin ETF in late April, pushing its ruling back until June.
But the SEC said in a filing on Wednesday it would take more time to consult with the public. It said it would seek input from the public on the potential for market manipulation of bitcoin and, by extension, the ETF. It said it would also seek comment on whether regulation of the bitcoin market had changed in the past five years.
The SEC has given the public 35 days from Wednesday’s filing to respond. The watchdog can extend its review period up to 240 days.
SEC Chairman Gary Gensler poured cold water on investors’ hopes of a quick sign-off for cryptocurrency ETFs last month when he said crypto investors needed more protection, and signaled that crypto exchanges would come under greater regulatory scrutiny.
“There’s a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction,” Gensler told lawmakers in May.
Cryptocurrencies are notoriously volatile and bitcoin is no exception. The price can swing by as much as $10,000 on any given day. Regulatory oversight is thin and part of the allure of the market is the degree of anonymity it affords users, compared to traditional assets such as stocks, commodities or even currencies.
Bitcoin was trading around $39,300 on Thursday. It’s lost around 8.5% so far in June, but is still up by more than 300% compared with this time last year.