The Wall Street Journal: SEC Says BlackRock and Others Lack Sufficient Bitcoin Spot ETF Data; BTC Drops Below 30K Briefly

The Wall Street Journal cited sources familiar with the matter, reporting that the U.S. Securities and Exchange Commission (SEC) has indicated that the applications for a Bitcoin spot ETF led by BlackRock and Vanguard are inadequate in terms of information clarity and completeness. Bitcoin briefly dropped below $30,000.

BlackRock's Efforts in Vain? SEC: Insufficient Data

BlackRock, the Wall Street financial group that boasts an exceptionally low failure rate for ETF applications, caused a stir in the market when it submitted an application for a Bitcoin spot ETF to the SEC, leading to a surge in the price of Bitcoin. Following BlackRock's lead, other perennially unsuccessful applicants for Bitcoin spot ETFs have resubmitted their application materials.

Amid market anticipation, insiders revealed that the SEC found the application materials submitted by these companies to be lacking in clarity and comprehensiveness. These companies include BlackRock and Fidelity Investments.

Since BlackRock submitted an ETF filing to the Securities and Exchange Commission holding actual Bitcoins, prices of Bitcoin and other cryptocurrency-related stocks have skyrocketed since mid-June. Cryptocurrencies have surged by approximately 20%, surpassing $30,000 for the first time since April. Coinbase Global, the custodian of the Bitcoin held by BlackRock's funds, saw its stock rise by over 30% during the same period.

Invalid Supervisory Sharing Agreement?

The supervisory sharing agreement allows collaborators to share information about market trading activities, clearing activities, and customer identities, thereby reducing the possibility of market manipulation. This agreement can help exchanges detect and prevent potential fraud and manipulation, enhancing market transparency and efficiency.

This is the approach BlackRock took through Nasdaq to convince the SEC. However, according to a report in the Wall Street Journal, the SEC deemed that insufficient information had been provided regarding these supervisory arrangements and has instructed these exchanges to retract their application documents.

However, the report in the Wall Street Journal also noted that neither the regulators nor the applicants mentioned above have responded to this news.