The US Securities and Exchange Commission (SEC) rejects a second attempt by Cameron and Tyler Winklevoss to list the first-ever cryptocurrency ETF on a regulated exchange, citing concerns about market manipulation.
The decision to block the ETF was voted for 3-1 by its sitting commissioners, with Republican commissioner Hester Peirce voting against.
Rumours that the SEC would approve a crypto ETF have recently fuelled a crypto market rally, however the price of Bitcoin plunged below US$8000 after the SEC’s decision was published.
At least 6 other Bitcoin-linked ETF’s are still pending before the US regulator.
A decision on the highly-regarded VanEck/SolidX Bitcoin ETF is likely to be handed down next month.
A Commissioner at the United States Securities and Exchange Commission (SEC) has heavily criticised the decision of her colleagues to reject a second bid by Tyler and Cameron Winklevoss to list shares of what would be the first-ever Bitcoin ETF.
Commissioner Hester M. Peirce said in a statement on the SEC’s website she’d “respectfully dissent” from the Commission’s order disapproving a proposed rule change to list and trade shares of the Winklevoss Bitcoin Trust on BATS BZX Exchange.
“Contrary to the Commission’s determination, I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product (“ETP”),” she said.
“Accordingly, I would set aside the action the staff took by delegated authority in this matter and approve the proposed rule change.
“In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market.
“More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order.”
Peirce also vented on social media. “Apparently, Bitcoin is not ripe enough, respectable enough, or regulatory enough to be worthy of our markets. I dissent” she tweeted.
Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent: https://t.co/gH5zXaKtmj
— Hester Peirce (@HesterPeirce) July 26, 2018
The SEC first rejected a plan by Tyler and Cameron Winklevoss, the founders of crypto exchange Gemini, to list a bitcoin ETF in March 2017.
The second rejection comes after the billionaire entrepreneurs lodged a new proposal in June this year.
The U.S. financial watchdog is yet to approve a cryptocurrency-based ETF, but there remains hope for at least 6 pending applications, many of which are seen as being stronger than the Winklevoss application.
VanEck/SolidX Bitcoin Trust
Industry insiders believe a joint proposal by New York investment management firm VanEck and blockchain company SolidX is most likely to become the first ever crypto ETF approved by the SEC.
The companies filled a joint application with the SEC last month to list a physically-backed bitcoin fund, called the ‘VanEck SolidX Bitcoin Trust’, on the CBOE BZX Equities Exchange. The ETF will be insured against loss or theft of bitcoin.
VanEck CEO and President, Jan F. van Eck, sent this letter to the SEC on July 20, emphasising industry wide support for the fund.
The SEC is due to make a decision on the proposal as early as next month.