After rebuffing plans for exchange traded funds tied to the volatile digital currency, the Securities and Exchange Commission (SEC) is moving to increase its oversight of bitcoin.
“For the first time ever, the SEC’s Office of Compliance Inspections and Examinations put cryptocurrencies and initial coin offerings on a list of focal points for scrutiny this year at the financial firms and advisers the agency oversees,” reports Bloomberg.
In January, a batch of ETF issuers withdrew plans for bitcoin ETFs, prompting investors to wonder when regulators would approve ETFs based on the digital currency.
Direxion, ProShares and VanEck are among a handful of ETF issuers that have withdrawn filings to launch bitcoin ETFs at the request of U.S. regulators. The Securities and Exchange Commission (SEC) requested the issuers withdraw their filings.
The news of the withdrawn plans for cryptocurrency ETFs comes just days after the SEC said it is soliciting comments from the investing public on two proposed rules changes that could prompt the long-awaited introductions of bitcoin ETFs.
Thus far, no exchange traded products related to digital currencies have been approved by U.S. regulators. Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.