ETF listing rejected by SEC

The US Securities and Exchange Commission has rejected a second attempt to list shares of the first ever Bitcoin Exchange traded fund (ETF). In June, Cameron and Tyler Winklevoss, founders of the cryptocurrency exchange, Gemini, proposed to list commodity based shares. The attempt was voted down 3-1 by the Commission.

Following the news, the price of Bitcoin that had been steadily climbing over the last two weeks, dipped 3% to $7880 according to data from Coinbase.

At the end of 2017, the SEC denied another application for the Winklevoss Bitcoin Trust, but undeterred the twins filed another application with slight amendments. The SEC, however, stated that they did not agree with the Winklevoss’s argument that their Gemini Exchange, as well as the crypto markets, were immune to manipulation. They also highlighted issues surrounding fraud and a lack of investor protection.

The SEC was quick to point out that the reason for disapproval doesn’t mean that Bitcoin and blockchain technology is not worthy, merely that there is still work to do before it becomes a solid investment opportunity. They added that their mission is designed to prevent fraud and manipulation and therefore any project that they sanction must satisfy their requirements in this area. At the time of writing, the SEC is yet to approve any crypto-based ETF, noting that there are “significant investor protection issues that need to be examined” before sponsors are able to offer these funds to retail investors.

Whilst the news has dealt a significant blow to the bitcoin and crypto markets, it is hoped that there is still an opportunity to improve. Whilst the SEC remain adamant that they are not anti-crypto, there is still hope for bitcoin or other cryptocurrency based ETFs to be available to American investors at some point in the future- subject to specified improvements.

 

E&S Group is a leading law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

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