Bitwise’s ETF Proposal Rejected By SEC

The most recent attempt at making a bitcoin exchange-traded fund (ETF) has been rejected by the U.S. Securities and Exchange Commission (SEC).

The SEC made an announcement that the ETF proposal, filed by Bitwise Asset Management in conjunction with NYSE Arca, did not meet legal requirements that would help in the prevention of market manipulation or other illegal activities. 

This rejection is nothing new as the SEC has rejected all bitcoin ETF proposals ever proposed that mostly referred to market manipulation and fraud concerns.

The order read:

“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices.’”

It was in January 2019 that Bitwise first filed the ETF proposal with NYSE Arca that initiated its first great step at offering retail customers a regulated bitcoin product. 

The company desires to be the first firm to launch an ETF in the U.S. but they do have a competition as VanEck had filed a similar proposal in January with SolidX and Cboe BZX.

VanEck did its version of the same, just last month.

Bitwise tried its best to assure the regulator that market manipulation and fraudulent activity are the problems that could definitely be tackled. It even published a number of reports on what seemed to be the “real” bitcoin market in order to prove the same. They further made an attempt of showing how market activity co-ordinate well with the regulated bitcoin futures markets.

The Wednesday’s rejection meant that the SEC only has one bitcoin ETF proposal sitting before them as of now which is filed by Wilshire Phoenix and NYSE Arca.