The Securities and Exchange Commission has rejected WisdomTree's proposal to list a bitcoin exchange-traded fund (ETF), making it the second rejection order to come down in this wave of applications for a spot-based bitcoin ETF.

The Commission cited the lack of surveillance sharing agreements and the subsequent inability to curb fraudulent or manipulative practices in the spot market.

"The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), in particular, the requirement that the rules of a national securities exchange be 'designed to prevent fraudulent and manipulative acts and practices' and 'to protect investors and the public interest,'" read the order.

This reasoning is similar to previous rejections. The SEC rejected VanEck's application midway through last month, citing the same inability to prevent "fraudulent and manipulative practices" and a failure to meet the burden of the Exchange Act Section 6(b)(5). Still, VanEck told The Scoop podcast this week, "We'll be back."

Some have taken issue with this hang-up, since issuers have repeatedly submitted research showing the use of certain pricing indices can mitigate potential market manipulation, and the bitcoin market has grown to a place where fair use far outstrips fraudulent activity.

Grayscale recently sent a letter to the SEC claiming this reasoning could violate the Administrative Procedure Act, since the Commission approved a futures-based bitcoin ETF, which the firm argues is also reliant on the spot price of the bitcoin market.

The next application awaiting a decision is Kryptoin, with a deadline date of Dec. 24. Others waiting in the wings include Valkyrie, First Trust & Skybridge, Fidelity, 21 Shares and ARK, Global X, Bitwise and Grayscale.