SEC to Review Its Bitcoin ETF Decision


Following yesterday’s shocking news about SEC Bitcoin exchange-traded fund applications rejection, the fresh news from SEC suggest that it plans to review its Bitcoin ETF decision.

24 August, AtoZ Markets – Yesterday, AtoZ Markets reported that US Securities and Exchange Commission has moved to reject all 9 pending Bitcoin exchange-traded funds applications. Today, the regulator has stated that it will review its decision.

SEC Rejects 9 Bitcoin ETFs

On 22 August, the US SEC has decided to reject all 9 Bitcoin ETF applications. The decisions emerge on the day ahead of the expected deadline for the decision for ProShares’ ETF rule change proposal. 

However, instead of making a single decision about ProShares’ proposals, the regulator has decided to reject other seven proposed ETFs as well. These are five proposals from Direxion and two proposals from GraniteShares.

As the reasoning for all three disapprovals, the SEC has stated the following:

“[T]he Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

SEC to Review Its Bitcoin ETF Decision

Today, the news following yesterday’s development states that the SEC has released letters that outline its intention to review the decision. The watchdog has delegated the authority to take this action on these applications. Yet, reportedly, the letters do not specify any deadline for the decision. In addition, the SEC did not say exactly what can happen as a result of this review. 

Exchange-traded funds are marketable securities that track a commodity, index, or a basket of assets, which are proportionately reflected in the fund’s securities. ETFs price fluctuates throughout the day depending on whether they are sold or purchased on a stock exchange. 

In case US SEC allows Bitcoin ETF, a fund would buy an underlying amount of actual BTC and distribute these funds into shares. These further would be distributed to shareholders. 

Earlier SEC ETF Decisions

Earlier last month, the US SEC has issued a denial order for an appeal from Winklevoss brothers regarding their rejected BTC ETF fund by Batz BTZX Exchange Inc. Their first application has been rejected by the regulator earlier in March 2017 due to the “the largely unregulated nature of BTC markets.”

Following this, SEC Commissioner Hester M. Peirce has issued a statement concerning the agency’s disapproval of the Winklevoss’ appeal. Peirce has stated that the SEC fundamentally went wrong with its latest decision and that the regulator is exceeding its “limited role,” when it concentrated on the characteristics of the underlying Bitcoin market, instead of the derivative. 

She has also stated that the disapproval order will most likely “inhibit” the institutionalization of the Bitcoin market.

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