The U.S. Securities and Exchange Commission (SEC) has raised eyebrows at the recent influx of spot bitcoin exchange-traded funds (ETFs) applications, citing insufficient clarity and comprehensive data in these filings, as reported by the Wall Street Journal.

Several organizations, including industry heavyweights BlackRock and Fidelity Investments, have joined the rush to submit their respective applications.

Mirroring BlackRock’s pioneering efforts, a host of conventional and crypto asset managers such as Fidelity Investments, Ark Investment Management, Invesco, WisdomTree, Bitwise Asset Management, and Valkyrie, have lately updated or altered their applications for bitcoin spot ETFs. If greenlit, such an ETF would represent a crucial turning point for the sector, facilitating more extensive institutional bitcoin access and enabling investors to trade bitcoin akin to traditional stocks, despite sacrificing certain bitcoin attributes.

It was anticipated that BlackRock’s submission would placate the SEC’s worries by consenting to share surveillance of a spot bitcoin-trading platform with Nasdaq, the proposed listing exchange for the ETF.

However, the SEC has communicated to the exchanges that the submissions fall short on critical aspects, such as the exact nature of the intended surveillance-sharing agreement. A representative from Cboe informed the Wall Street Journal of their intentions to amend and resubmit the application.

The SEC’s critique has once again underscored the regulatory hurdles overshadowing the launch of bitcoin spot ETFs. Market players are keenly awaiting updates from asset managers and exchanges to address the issues flagged by the SEC. Amid the mounting anticipation for the potential greenlighting of a spot bitcoin ETF, industry stakeholders are hopeful that the amended submissions will furnish the requisite clarity and extensive data to secure regulatory approval.