The United States Securities and Exchange Commission has disapproved of a rule change that would allow exchange-traded fund (ETF) provider WisdomTree to list and trade shares of a Bitcoin BTC ETF.

According to an Oct. 11 filing, the SEC rejected a proposed rule change that would have allowed WisdomTree to list and trade shares of its Bitcoin Trust on the Cboe BZX Exchange after several delays due to extensions and comment periods. WisdomTree first filed the spot Bitcoin ETF application on Jan. 25 with publication in the federal register on Feb. 14.

The SEC said any rule change in favor of approving the ETF would not be “‘designed to prevent fraudulent and manipulative acts and practices” nor “protect investors and the public interest.” Will Peck, WisdomTree’s head of digital assets, told Cointelegraph the firm would be working on ways to provide investors access to crypto but hinted its plans for an ETF were still ongoing.

“WisdomTree believes in the power of transparency and we only put out products that meet high regulatory, compliance and security frameworks as this will lead to success for investors," said Peck. "We know that regulatory concerns take time to address, and appreciate the due diligence in doing so. We acknowledge that this is a slow-moving process, and we aren’t letting that stop us from innovating in other ways in the meantime."

In a September interview, Peck said that the SEC’s market manipulation claims would likely be “the hardest nut to crack” in an ETF approval, adding WisdomTree was “kind of watching this and seeing what’s going to happen” but did not plan to take Grayscale’s approach in filing a lawsuit with the SEC over the rejection of its Bitcoin ETF. He said the company planned to “engage more productively” with the U.S. regulator, positing the SEC would “ultimately get there” in approving a spot crypto investment vehicle.

Similar to its December 2021 rejection of a WisdomTree spot Bitcoin ETF offering, the SEC concluded that the BZX exchange did not have the ability “to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules.” In addition, the financial regulator said BZX had been unable to provide data demonstrating ”that wash trading and other possible sources of fraud and manipulation in the broader Bitcoin spot market will be ignored by market participants.”

“BZX has not met its burden of demonstrating an adequate basis in the record for the Commission to find that the proposal is consistent with Exchange Act Section 6 (b) (5), 225 and, accordingly, the Commission must disapprove the proposal,” said the filing.

Related: Why the world needs a spot Bitcoin ETF in the US: 21Shares CEO explains

To date, the SEC has not approved a single spot crypto ETF application in the United States, despite criticism from many lawmakers, regulators and industry leaders. However, the regulator began approving ETFs linked to Bitcoin futures starting in 2021, giving the green light to companies including ProShares and Valkyrie.

This story was updated to include a response from WisdomTree.