It has hardly come as a surprise, but the latest application to be decided upon by the SEC in relation to a Bitcoin ETF has come back negative. The Securities authority in the US has deemed the proposal, filed by Bitwise Asset Management in conjunction with NYSE Arca, did not meet legal requirements to prevent market manipulation or other illicit activities.
Bitcoin ETFs have been banging down the SEC’s door for nearly three years now with little success. The same issues have persisted and the regulator has not budged on these issues. Concerns about market manipulation and illicit activities have seen attempts to be addressed, but not to a high enough standard.
However, it is not all doom and gloom as Bitwise has made statements following this denial, stating that they appreciate the work that the SEC has done and that they see this as progress regardless of the outcome.
The word from the SEC is starting to get a little repetitive; however, this time, the concerns were more directed towards NYSE Arca, than Bitwise. They said:
“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.'”
Leading up to this latest decision by the SEC, there was not too much to be optimistic about in relation to an ETF being granted. First, the chairman of the SEC made comments that the Bitcoin market was still miles away from being traded on a large and established exchange, again stating the same old concerns.
More so, VanEck, with its positive application that many were backing for success, suddenly pulled their application a month before a decision was to be made. They decided to put their efforts into the launch of a limited Bitcoin ETF for institutional traders instead.
Still, Bitwise has said that they are still pleased with the progress that is being made towards this goal.
“Historically, the approval of novel exchange-traded products that open up new asset classes has required multiple years of regulatory engagement. What matters is continued progress and the investment of time from regulators, and that’s what we see here,” Bitwise outlined.
The company went out to say:
“While we were not able to satisfy the SEC’s concerns inside the statutory 240-day review window afforded these filings, and while they have identified the need for additional data and context to interpret our key findings, we are pleased with the progress that the industry has made and believe that, with additional research and continued progress in the broader ecosystem, the remaining concerns and challenges raised in this order will ultimately be satisfied.”