The US Securities and Exchange Commission has just rejected a proposal for the world’s first exchange-traded Bitcoin fund (ETF) from the Winklevoss twins.
This comes amid bullish Bitcoin sentiment which is partly believed to have stemmed from expectations that the SEC could soon approve a similar ETF.
This news comes from CNBC, which reports that the SEC cited safety concerns in its rejection of the Winklevoss-backed ETF.
More specifically, the SEC is said to have disagreed with the Winklevoss’ assertion that Bitcoin markets and by extension the Gemini Exchange would be ”uniquely resistant to manipulation”.
In addition to this, the SEC is said to have lifted both investor protection and potential fraud as areas in which the application lacked.
Cameron and Tyler Winklevoss, formerly of Facebook fame but now more known as the founders of the cryptocurrency exchange Gemini, initially submitted an application for the so-called ”Winklevoss Bitcoin Trust” during the past year.
However, they reportedly submitted a proposed rule change this June for the cryptocurrency ETF, which the SEC has now rejected.
This should not come as too much of a surprise, as the SEC has not yet ratified a single cryptocurrency ETF. The SEC has previously argued that the main hurdle to clear before being able to sanction cryptocurrency-based ETFs is the issue of sufficient investor protection.
Nevertheless, the SEC stated that the rejection of this particular ETF should not be seen as an assessment of either blockchain technology nor Bitcoin as a means of payment. Rather, the decision rests solely on the proposal itself.
The SEC also noted that the agency is intended to protect investors and prevent manipulative or fraudulent acts. Furthermore, this issue could prove intricate to solve, as 95% of the Bitcoin trade volume is facilitated through cryptocurrency exchanges outside of the US.
Nonetheless, as of yet, there is no word on the other Bitcoin ETFs for which the SEC recently delayed its decisions whether to green-light or not.
Moreover, the SEC would also still appear to be mulling whether to approve a Bitcoin ETF which would be operated by blockchain platform SolidX and the New York-based Investment management firm VanEck, something which Toshi Times has previously covered.
The Commission’s vote on the Winklevoss-backed ETF was 3 to 1, meaning that it was not entirely repudiated by the SEC. Furthermore, the SEC still has to respond publicly to the other ETF proposals which it is currently reviewing.
Whilst things currently look gloomy for the Winklevoss ETF, it remains to be seen what the SEC makes of the other ETF proposals in the coming weeks.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.