The US Securities and Exchange Commission has denied a bid to checklist a bitcoin-tied exchange-traded fund (ETF), citing the chance of fraud and an absence of regulation among the many world’s bitcoin markets.
The choice caps a more than three-year quest by bitcoin traders Cameron and Tyler Winklevoss, who first sought to checklist the bitcoin-tied product in mid-2013. The SEC has been weighing a proposed rule change that will pave the best way for the ETF to be listed on the Bats BZX Exchange.
In that point, the SEC has solicited quite a few public feedback and punted its choice ahead a number of occasions. As nicely, the ETF’s backers have expanded the scope of the providing from an preliminary $20m to $100m.
According to a publicly distributed discover detailing the choice, the SEC mentioned:
“As discussed further below, the Commission is 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 company went on to specify that it believes a mixture of regulatory opaqueness and fraud threat ought to preclude any form of bitcoin ETF right now.
The SEC mentioned:
“The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) should, along with different relevant necessities, fulfill two necessities which can be dispositive on this matter. First, the alternate should have surveillance-sharing agreements with vital markets for buying and selling the underlying commodity or derivatives on that commodity. And second, these markets have to be regulated.”
That mentioned, the SEC left the door open to future alternate merchandise tied to the digital currency.
“The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop,” the doc reads. “Should such markets develop, the Commission could consider whether a bitcoin ETP would, based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act.”
The full ETF choice could be discovered beneath:
34-80206 by CoinDesk on Scribd
Image Credit: Image through TechCrunch Disrupt, by Max Morse for TechCrunch
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