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The U.S. securities markets watchdog hasn’t changed its mind about BTC spot exchange-traded funds (ETFs), and in its latest action, it has turned down applications from digital asset investment manager NYDIG and ETF provider Global X.

The Securities and Exchange Commission (SEC) was to make a decision on the NYDIG application by January 15, 2022. However, it extended the time period for ruling on the proposal by 60 days, making March 16 the new deadline.

In its filing, the SEC has now dismissed the ETF application by NYDIG, whose shares were to be listed and traded on the NYSE Arca exchange. 

“The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice,” the agency said, noting that in particular, the exchange had failed to show it could enforce the requirement “that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.’”

The regulator referred to the need for an exchange that lists BTC spot ETFs to have a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets. Such an agreement provides a necessary deterrent to manipulation and allows investigation if it does occur. 

In the application, NYDIG and NYSE Arca had argued that the SEC’s manipulation concerns had been significantly mitigated and that they had enough measures in place to protect investors and deter fraud. However, the SEC is having none of it, claiming that its standards haven’t been met.

The watchdog did note that its rejection of the ETFs isn’t reflective of its stance on the value or utility of blockchain technology or virtual assets.

While it has been adamant against BTC spot ETFs, the SEC under Chairman Gary Gensler has already approved several futures ETFs. This discrepancy in its treatment of these two types of ETFs has not gone down well with some, with Grayscale, an institutional investment firm that’s under the Mastercard cartel-linked Digital Currency Group, saying that the SEC is breaking the law by not treating all ETFs in the same way.

Watch: US Congressman Patrick McHenry on Blockchain Policy Matters with Bitcoin Association’s Jimmy Nguyen

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