Thus far, the US Securities and Exchange Commission (SEC) has rejected all bitcoin ETF proposals and its latest decision saddened the Bitwise Asset management which was waiting to get the green signal from SEC. However, it seems the SEC went in the opposite direction.

SEC has published a document on its website, rejecting the final application of Bitwise’s Bitcoin ETF Trust. If it would have approved, the ETF would track the spot price for Bitcoin. However, the SEC on Wednesday states that the ETF didn’t meet legal requirements necessary to crack-down the illicit activities and other market manipulation.

Initially, the firm filed the ETF proposal with NYSE Arca in January 2019 and in August, SEC  postponed its decision together with two more crypto ETF applications. The decision was however supposed to be heard on Oct 13 as Matt Hougan, managing director of Bitwise commented: “We’re closer than we’ve ever been before to getting a Bitcoin ETF approved.”

Nevertheless, the latest release of SEC denying the approval of Bitwise Bitcoin ETF mentioned lacks from the sides of NYSE Arca than Bitwise’s proposal itself. The release reads that;

“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca 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 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.’” 

On the other side, Bitwise published a long report, reassuring SEC by pointing out the “fake trading volume” that major crypto marketplace is presenting – however, SEC didn’t convince with the in-depth report of Bitwise, in fact, raised concern over order books of crypto exchanges itself. The commission in its 100 plus rejection letter writes that;

“Because, among other things, the Sponsor has asserted that 95% of the bitcoin spot market consists of fake and non-economic activity, but has not established that it has, in fact, identified the “real” bitcoin market, or that the “real” bitcoin market is isolated from the fraudulent and manipulative activity.”

However, SEC’s constant attempt of rejecting the ETF continues and with the Bitwise Bitcoin ETF rejection, the regulator now has only one Bitcoin ETF left which was filed by Wilshire Phoenix and NYSE Arca.

Image Source – Flickr

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.