The Securities and Exchange Commission denied the proposed Winklevoss Bitcoin Trust ETF on Friday at around the market’s close. Basically more than three years of waiting and prodding have resulted in absolutely nothing. The untraceable cryptocurrency was down 4.7% to $1,100.44 at the market’s close.
Here’s the SEC’s ruling in full. The ETF was disapproved, because the proposed rule change to the BATS Exchange was “not consistent with these legal requirements.” Here’s an excerpt:
Photographer: Chris Ratcliffe/Bloomberg
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 Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.
The Commission takes issue with the unregulated markets for bitcoin. I suppose investors will now fixate on whether SolidX or Greyscale will get approval. This decision doesn’t look good for them.
MarketWatch’s Ryan Vlastelica reported that Winklevoss Capital remained “optimistic and committed” to making COIN — the symbol it would’ve traded under — happen.
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