Another One Bites The Dust – SEC Denies Another Bitcoin ETF
The U.S. Securities and Exchange Commission on Tuesday denied for the second time in less than three weeks a request to bring to market a first-of-its-kind product tracking bitcoin, the digital currency.
The SEC announced in a filing its decision denying Intercontinental Exchange Inc’s NYSE Arca exchange the ability to list and trade the SolidX Bitcoin Trust. Previously, the regulatory agency said it had concerns with a similar proposal by investors Cameron Winklevoss and Tyler Winklevoss.
The SEC decision shows the first decision wasn’t something against the Winklevoss Twins, but Bitcoin itself w=is the problem for them. The lack of oversight, regulation and the potential for fraud in the broader bitcoin space worked against the proposed ETF. In its latest ruling, the SEC mirrored the language used in their previous denial, once again referring to 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.”
Earlier this month, the SEC denied an application by CBOE Holdings Inc’s Bats exchange to list The Bitcoin ETF proposed by the Winklevoss brothers. On Friday, Bats asked the SEC to review its decision not to allow that fund to trade. Bitcoin had scaled to a record of more than US$1,300 this month, higher than the price of an ounce of gold, as investors speculated that an ETF holding the digital currency could woo more people into buying the asset.
After denial of the Winklevoss-proposed ETF, the digital currency’s price plunged as much as 18 percent. It has rebounded partially since then and was near US$1,055 on Tuesday, up 1.3 percent from the previous day. Bitcoin is a virtual currency that can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government.
Meanwhile, the SEC still sits on one remaining bitcoin ETF proposal — Grayscale Investments LLC’s Bitcoin Investment Trust, which filed with the SEC to have its trust listed on the NYSE back in January, seeking to launch with some $500 million. Given the outcomes for the prior two, things look grim for the viability of the Bitcoin Investment Trust.