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October 18, 2019
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SEC Rejects Another High-Profile Bitcoin ETF Proposal

Another high-profile proposal for a bitcoin exchange-traded fund (ETF) has been denied by the U.S. Securities and Exchange Commission (SEC). The company, nonetheless, emphasised that the disapproval was not based mostly on whether or not bitcoin has utility or worth as an innovation or an funding. Shares of the Bitwise Bitcoin ETF Trust had been to be listed on the NYSE Arca alternate.

Also learn: IRS Issues New Crypto Tax Guidance After 5 Years – Experts Weigh In

SEC Rejects Bitwise’s Bitcoin ETF

The SEC issued an order disapproving one other high-profile bitcoin ETF on Wednesday. NYSE Arca Inc. initially filed a proposed rule change to checklist and commerce shares of the Bitwise Bitcoin ETF Trust with the company on Jan. 28. In its order, the SEC wrote:

The Commission emphasizes that its disapproval doesn’t relaxation on an analysis of whether or not bitcoin, or blockchain know-how extra typically, has utility or worth as an innovation or an funding.

SEC Rejects Another High-Profile Bitcoin ETF Proposal

The company clarified that the proposal was disapproved as a result of the NYSE Arca alternate has not proven that its proposal is in line with “the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices.’”

Bitwise’s Response

Following the SEC’s order, Bitwise Asset Management issued an announcement in response. Global Head of Research Matt Hougan stated, “We deeply appreciate the SEC’s careful review,” including:

We sit up for persevering with to productively interact with the SEC to resolve their remaining considerations, and intend to re-file as quickly as acceptable.

Noting that “the bitcoin market itself has evolved in important and positive ways in recent years,” he outlined numerous noteworthy developments. Among them are the expansion of regulated CME bitcoin futures market, which recurrently trades over $200 million in day by day quantity, the event of a lot of regulated bitcoin custodians, and the numerous enchancment within the high quality of bitcoin spot buying and selling market.

SEC Rejects Another High-Profile Bitcoin ETF Proposal
Matt Hougan

Another necessary improvement is “The addition of market surveillance and reporting requirements for spot bitcoin exchanges under the New York Department of State’s Bitlicense program, which covers six of the ten significant bitcoin exchanges in the world,” Hougan additional famous. As for the Bitwise Bitcoin ETF proposal, he stated:

With further analysis and continued progress within the broader ecosystem, the remaining considerations and challenges raised on this order will in the end be happy.

“We’re closer than we’ve ever been before to getting a bitcoin ETF approved,” Hougan instructed CNBC on Monday.

SEC Still Has Some Concerns

SEC Chairman Jay Clayton additionally believes that the Commission is nearer to approving a bitcoin ETF than it did earlier than, he revealed in an interview with CNBC earlier this month. However, “There’s work left to be done,” the chairman emphasised, elevating numerous points that have to be addressed. “How do we know that we can custody and have a hold of these crypto assets? That’s a key question,” he opined. “And an even harder question, given that they trade on largely unregulated exchanges, is how can we be sure that those prices aren’t subject to significant manipulation.”

SEC Rejects Another High-Profile Bitcoin ETF Proposal
Jay Clayton

The SEC chairman elaborated:

Progress is being made however individuals wanted to reply these arduous questions for us to be snug that this was the suitable kind of product.

Further, Clayton stated that “bitcoin will need to become better regulated before it trades on a major exchange,” CNBC additionally reported.

On Sept. 17, Cboe BZX Exchange Inc. withdrew its proposed rule change to checklist and commerce Solidx Bitcoin Shares issued by the Vaneck Solidx Bitcoin Trust. The SEC was attributable to make its choice on this proposal on Oct. 18. Now Vaneck is providing its bitcoin product to institutional traders beneath Rule 144A of the Securities Act of 1933, as amended.

When do you assume the SEC will approve a proposal for a bitcoin ETF? Let us know within the feedback part beneath.

Images courtesy of Shutterstock.

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Tags on this story
approval, Bitcoin, bitcoin etf, Bitwise, BTC, crypto, crypto belongings, Cryptocurrencies, Cryptocurrency, Digital Currency, alternate traded fund, nyse arca, SEC, solidx, vaneck, Virtual Currency
Kevin Helms

A pupil of Austrian Economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His pursuits lie in Bitcoin safety, open-source methods, community results and the intersection between economics and cryptography.

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