US regulator stands by decision barring Winklevoss bitcoin ETF


Even the New York Stock Exchange filed for an ETF in January with their hook being that investors could "obtain daily short, leveraged long or leveraged short exposure to the lead month bitcoin futures contract" traded on the Chicago Mercantile Exchange (CME) or the Cboe Global Markets (CBOE), or any USA exchange "that subsequently trades Bitcoin futures contracts".

A couple of hours after the U.S Securities and Exchange Commission announced that it has turned down the proposed BTC ETF application by the Winklevoss Twins, the value of Bitcoin (BTC) has declined below the $8k level. The exchange commission said that it backed out of a change of rule, at the behest of Bats BZX exchange. CNBC reports that the proposal to list the Winklevoss Bitcoin Trust's commodity-based shares on BATS BZX Exchange was voted down 3-1 by the securities watchdog on Thursday. The SEC said it found that neither the filing nor its related rules change met the requirements of the Exchange Act and the agency's existing guidelines. The Commission issued a 96 page order that set aside the previous disapproval, but the order also disapproved BZX's proposed rule change.

"I am concerned that the Commission's approach undermines investor protection by precluding greater institutionalization of the Bitcoin market". The SEC said the Cboe Global Markets platform that would have listed the Bitcoin fund failed to prove that the underlying market was "resistant to manipulation".

This is the second time the SEC rejected an application from the twins for the "Winklevoss Bitcoin Trust".

According to the SEC's document, BZX argues in its most recent proposal that the "geographically diverse and continuous nature of bitcoin trading makes it hard and prohibitively costly to manipulate the price of bitcoin", rendering it "generally ... less susceptible to manipulation than the equity, fixed-income and commodity futures markets".

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Thursday, July 26 might decrease as a serious setback for the chance of bitcoin exchange-traded funds (ETFs). The announcement caused an immediate dip in Bitcoin's price by around 3%.

Since, it is expected that ETF will be a tool that will attract more institutional investors into the Bitcoin market.

"The disapproval order demonstrates a skeptical view of innovation, which may have an adverse effect on investor protection, efficiency, competition, and capital formation well beyond this particular product", Peirce said.

On the other hand, the company submitted the same application again this year, and the SEC appeared more open to the idea.

That news sent the markets into a tailspin, as many analysts took it as an omen that the SEC is unlikely to approve any of the manifold cryptocurrency ETF applications now pending at the agency.