Second Winklevoss Bitcoin ETF Application Gets Rejection from SEC


Back in February 2017, the US SEC has disapproved the application for Bitcoin ETF filed by the Winklevoss twins. Yesterday, the US regulator has stated it decided to also reject the second Winklevoss Bitcoin ETF application.

27 July, AtoZ Markets – The US Securities and Exchange Commission (SEC) has reportedly rejected the second application for a Bitcoin exchange-traded fund filed by Winklevoss twins.

Second Winklevoss Bitcoin ETF Application Gets Rejection from SEC

The release published by the SEC yesterday noted that the Bats BZX Exchange, Inc. (BZX) filed a proposed rule change with the regulator for the permission to list and trade shares of the Winklevoss Bitcoin Trust in 2016. The first application for a Bitcoin ETF has been rejected by the US watchdog back in February 2017. That time, the regulator has stated that it made this decision due to the largely unregulated nature of the cryptocurrency market, specifically, Bitcoin. The agency has also stated:

”When the spot market is unregulated–there must be significant, regulated derivatives markets related to the underlying asset with which the Exchange can enter into a surveillance-sharing agreement.”

Then, after the rejection of the first proposition, the group has filed “a timely petition seeking Commission review of the disapproval by delegated authority.” 

SEC Concerned About Foreign Crypto Exchanges

Now, the SEC has issued a new announcement, thus disapproving the petition. In the petition, Winklevoss brother states that cryptocurrency markets are “uniquely resistant to manipulation.” However, the US regulator has noted that “the record before the Commission does not support such a conclusion.”

The regulatory body has also highlighted that their decision regarding the petition was not based on whether cryptocurrencies or Blockchain technology “[have] utility or value as an innovation or an investment.” The supervisor has added:

“Rather, the Commission is disapproving this proposed rule change because… 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… in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.”

In addition, the SEC has stated that it is concerned about the fact that a big portion of Bitcoin trading takes place on “unregulated exchanges outside the United States.” It also noted the low liquidity of cryptocurrencies as one of the reasons for its concern.

Think we missed something? Let us know in the comments section below. 

    Share Your Opinion, Write a Comment