Derived from Coinotag, the U.S. Securities and Exchange Commission (SEC) has halted ETF filings proposing 3-5 times leverage on crypto assets, citing violations of the Investment Company Act of 1940 that limit exposure to 200% of value-at-risk. The SEC issued warnings to major ETF providers like Direxion, ProShares, and Tidal for exceeding leverage limits on crypto ETFs. This regulatory action requires issuers to revise applications to comply, delaying launches of high-leverage crypto ETFs in the U.S. market.
SEC Halts High-Leverage Crypto ETF Filings, Capping Exposure at 200%
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