The Securities and Exchange Commission (SEC) has said recent applications filed by asset managers to launch spot Bitcoin exchange-traded funds (ETFs) are “inadequate.”

Since mid-June, Bitcoin has rallied over 20% in anticipation of a spot Bitcoin ETF. But reports of the SEC rejecting those filings triggered a panic in the market.

The Wall Street Journal reported that the SEC found the recent Bitcoin ETF filings from BlackRock, Fidelity, and other asset managers inadequate. 

According to people familiar with the matter, the SEC has reported to Nasdaq and the Chicago Board Options Exchange (Cboe) that the filings aren’t “clear and comprehensive.” Specifically, the SEC returned the filings because the name of the spot Bitcoin exchange with which the asset managers signed a “surveillance-sharing agreement” was missing.

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Also, the says SEC needs more details about the surveillance agreements. It would allow the asset managers to make the required disclosures and refile for the ETF. A Cboe spokeswoman has confirmed with the WSJ that they would update the filings and refile.

The reports created an outburst of panic amongst the community members, and the price of Bitcoin (BTC) fell by 5% within 15 minutes.

Due to sudden volatility, trades worth over $88.5 million were liquidated in less than one hour. The amount from long trades contributed over 89.14% to the liquidation amount.

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