Bitcoin price falls below $7,900 as the U.S. Securities and Exchange Commission disapproved a Bats BZX Exchange application to list the Winklevoss Bitcoin ETF.
This is the second time SEC rejected the application. With this development, bitcoin price dropped 3.5%.
Immediately after, Bats submitted a petition to review that decision, triggering another wave of comments – and expectation – about the agency’s willingness to approve a cryptocurrency exchange-traded product.
Yet the concerns highlighted in the March 2017 decision don’t seem to have abated, according to the decision published Thursday, July 26, by the SEC.
As reported by Coindesk, SEC stated that its decision doesn’t constitute a judgment against cryptocurrencies and blockchain in general, but rather the structure of the proposal that was pitched.
Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment. Rather, the Commission is disapproving this proposed rule change because, as discussed in detail below, 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 the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.”
The Commission further stated the door is open to likely approve the application noting that “over time, regulated bitcoin-related markets may continue to grow and develop.
SEC stated: Existing or newly created bitcoin futures markets may achieve significant size, and an ETP listing exchange may be able to demonstrate in a proposed rule change that it will be able to address the risk of fraud and manipulation by sharing surveillance information with a regulated market of significant size related to bitcoin, as well as, where appropriate, with the spot markets underlying relevant bitcoin derivatives,”
If this is met, “the Commission would then have the opportunity to consider whether a bitcoin ETP would be consistent with the requirements of the Exchange Act.”
VanEck, investment management firm has lobbied the US Securities and Exchange Commission (SEC) in attempt to interest the regulator in authorizing a Bitcoin exchange-traded fund. In a letter dated July 20, VanEck, announced it planned to partner with fellow operator SolidX to launch a fund, statings its belief that the industry was both ready and able to support it.
Bitwise Asset Management, creator of the world’s first privately-offered cryptocurrency index fund, the Bitwise HOLD 10 Private Index Fund, announced the filing of the registration statement for a new fund, the first publicly-offered cryptocurrency index exchange-traded fund (ETF).
Another exciting milestone for Bitwise: Today, we filed a registration statement with the Securities and Exchange Commission for the first cryptocurrency index ETF. https://t.co/9lsuEAiVek
— Bitwise (@BitwiseInvest) 24 July 2018
The new ETF will be called the Bitwise HOLD 10 Cryptocurrency Index Fund. It aspires to track the returns of Bitwise’s HOLD 10 Index, a market-cap-weighted index of the 10 largest cryptocurrencies, rebalanced monthly.