The U.S. Securities and Exchange Commission has denied the latest attempt to list shares for the Winklevoss Bitcoin Trust, voting 3-1 to reject a proposed rule change submitted by BATS BZX Exchange. Thursday’s decision marks the second time the SEC has rejected the proposed Winklevoss ETF.
In rendering its decision, the Commission made no judgment about Bitcoin or blockchain’s innovation or investment value. Instead, the SEC stressed its mission to protect investors from manipulation and fraud. The agency rejected claims that Bitcoin markets are “uniquely resistant to manipulation.”
The regulatory agency cited the unregulated nature of most offshore markets as just one particular area of concern, observing that 95 percent of trading volume takes place on exchanges based outside of the United States.
The decision noted that regulators are open to approving a future ETF as “regulated Bitcoin-related markets” grow and mature, provided that future rule change proposals are “able to address the risk of fraud and manipulation by sharing surveillance information with a regulated market of significant size related to bitcoin, as well as, where appropriate, with the spot markets underlying relevant bitcoin derivatives.”
According to CNBC, Gemini President Cameron Winklevoss said:
"Despite today's ruling, we look forward to continuing to work with the SEC and remain deeply committed to bringing a regulated bitcoin ETF to market and building the future of money."
Bitcoin markets reacted to the news with a roughly 6% price drop that saw Bitcoin’s value fall to just below $7,800 on Friday morning. By press time, the price had recovered to about $8,176.