After the approval of futures-backed bitcoin funds in October, the US Securities and Exchange Commission still vetoed the proposal for two bitcoin exchange-traded funds, dealing a blow to market participants.

In a notice, the markets regulator said both of the proposals to list and trade shares of Valkyrie Bitcoin Fund and the Kryptoin Bitcoin ETF Trust failed to be approved because they did not meet its standard.

In October, the SEC approved two bitcoin futures-based funds, the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, which debuted on Wall Street the same month.

However, the regulator has yet to accept an application for a spot bitcoin ETF. Last month, the SEC rejected an application to create a spot bitcoin fund from VanEck. On December 17, it delayed a decision on a similar proposal from Grayscale Bitcoin Trust.

ETFs are investment tools that track baskets of stocks and have become popular due to lower fees. Bitcoin-ETFs, which provide exposure to the digital currency, aims to save the hassle of buying the cryptocurrency from an exchange and managing the private keys.

Industry groups and stock exchanges have long sought SEC approval for these products.

However, Securities and Exchange Commission chairman Gary Gensler and investor advocates worry about what they see as a lack of regulatory oversight and surveillance which heightens the potential for fraud and manipulation.