SEC Rejects Winklevoss Bitcoin ETF

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The United States Securities and Exchange Commission (SEC) Today rejected Cameron and Tyler Winklevoss’ proposal for a Bitcoin exchange-traded-fund (ETF). The regulatory body cited the absence of digital currency regulation and the potential for fraud among its reasons for refusing the bid.

In the decision released earlier today, the SEC noted that it was “disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”

“The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.”

The SEC did, however, note that Bitcoin is still in its developmental stage and that regulated markets may yet become a reality. If that occurs, the SEC could reconsider the matter. After the decision, Tyler Winklevoss issued a statement indicating that the twins will continue to try to work with the Commission to see their vision fulfilled in a way that protects the marketplace and investors.

Meanwhile, two similar ETF filings continue to await an SEC decision, with a bid from SolidX scheduled to be decided by March 30, 2017. The second filing is from Grayscale Investments, and has no scheduled deadline at this time. Given today’s decision, neither of those pending bids would appear to have much chance of success.

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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