The U.S. Securities and Exchange Commission (SEC) has rejected a request by the Winklevoss brothers on the authorisation of a Bitcoin ETF. Thus, the authority confirms its decision of last year. However, not all SEC members are behind the decision.
Already in October 2016, the Bats BZX Exchange has filed with the SEC a request for listing a Bitcoin ETF. The SEC granted the request of the investor twins in March of last year a rebuff. In its statement, the SEC led mainly to concerns about control and monitoring mechanisms in the relevant market places. Another Problem is the lack of regulation of the markets turned to the Authorities.
The Winklevoss brothers huddled on a Revision of the decision and tried to reach them via Petition. The renewed rejection by the SEC, as before, with security and regulatory concerns regarding the BZX Exchange:
“[…] while the BZX indicating that […] transactions on the Bitcoin Blockchain are open to the public for everyone to see, identified the Blockchain parties to a transaction only through a pseudonymous Public Key address. Furthermore, a distinction is also made between Bitcoin-trading activities, and other transfer activities of Bitcoin (for example, for credit Transfers, purchases of Goods or services).“
The crypto stock exchange is not complete, therefore, the requirements of the SEC in relation to the Curb fraudulent activities:
“Rather, the Commission approves this proposed rule change because the BZX has not fulfilled its obligations under the stock exchange act and the rules and regulations of the Commission, to demonstrate that your application complies with the requirements of the stock exchange act in accordance; in particular, with the requirement that their rules must be designed so that fraudulent and manipulative acts and practices, be prevented.”
The resistance in the SEC
The SEC’s decision is not liked unanimously. Member of the Commission, Hester M. Peirce is of the opinion that the Winklevoss-the application complies with the conditions of the stock exchange act. It is critical that the SEC had been received in your justification and less on the proposed Exchange-Traded Product (ETP), but rather on the Bitcoin market in General:
“Because of the disapproval of the arrangement focuses on the Bitcoin spot market, the important role the framework plays the stock exchange as a self regulatory organisation (SROs) in the framework of our Regulation, not a reasonable weight. BZX should and would play a Central role in the Monitoring of the trade in shares of the Trusts. In the exercise of this function, BZX would perceive her as a SRO assigned tasks and the supervision of the Commission are subject to. In the exercise of this responsibility, BZX strong regulatory and business incentives, to ensure the integrity of the products it lists for trading. Nothing in the Protocol suggests that BZX is not willing or not able to meet its obligations under the exchange act.“
There is no reason for FUD
From the point of view of the SEC, the cancellation is understandable. With regard to the upcoming September dates, in which it requests the admission of further ETF, it is understandable that the authority is interested in the expectations with regard to Bitcoin ETF is small. The Bitcoin give in to price something, currently 3.9 per cent, is not the end of the world. After the Bitcoin rate of the last few days, this small correction is to increase absolutely in the frame, and should therefore not be overestimated.