SEC Rejects NYSE Listing of Bitcoin Trust

On February 26, 2020, the Securities and Exchange Commission (the “SEC”) published a notice of its disapproval of the application by the New York Stock Exchange (NYSE Arca, Inc. or “NYSE Arca”) to amend its rules to allow it to list and trade shares of the United States Bitcoin and Treasury Investment Trust.   Among other things, the SEC stated that Securities Exchange Act of 1934 Section 6(b)(5) requires that the rules of a national securities exchange must be designed to prevent fraudulent and manipulative practices.  According to the SEC, this can be met by the exchange showing that is has a surveillance sharing agreement and can get information from an underlying regulated market of “significant size” trading the underlying asset, and the NYSE Arca had no such agreement with a market trading Bitcoin.  The SEC made clear that it was not commenting on the value of Bitcoin as an investment.