SEC Blocks 3x and 5x Leveraged ETF Filings Over Rule 18f-4 Violations

The U.S. Securities and Exchange Commission issued nine warning letters Tuesday to major ETF providers including Direxion, ProShares, and Tidal Financial, halting proposed funds designed to deliver three to five times daily returns on stocks and cryptocurrencies. The agency cited violations of Rule 18f-4, which limits a fund's value-at-risk exposure to 200% of its reference benchmark. ProShares withdrew several applications within one day of the letters being posted.