The United States Securities and Exchange Commission (SEC) has officially rejected the proposal for a Bitcoin exchange traded fund (ETF), submitted by Bitwise Asset Management and the NYSE Arca, after repeated delays. According to the SEC, the application did not fully satisfy the Commission regarding unscrupulous market activity.
As contained in the official rejection document which is 112 pages long, the SEC suggests that there is too much of a chance for market manipulation and other activities that could possibly harm investors and traders. The Commission has in the past, always cited market manipulation as one of the major reasons it’s against the Bitcoin ETFs. The document also mentions that Bitwise and NYSE Arca have suggested that 95% of the market is fake but has not described how the remaining 5% would differ.
“[The Bitwise and NYSE Arca team] asserts that 95% of the spot Bitcoin market consists of fake and non-economic activity, but has not established that the “real” Bitcoin market is isolated from that fraudulent and manipulative activity.”
The order then concludes saying that the SEC has not found that the application “is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange”.
“IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the Exchange Act, that proposed rule change SR-NYSEArca-2019091…is disapproved.”
A few days ago, the Bitwise managing director and global head of research, Matt Hougan, expressed heavy optimism at the possibility of an approval. According to him, “we’re closer than we’ve ever been before to getting a Bitcoin ETF approved,” because the market is a lot more evolved than it was two years ago.
So far, the SEC has rejected all applications for a Bitcoin ETF.
Bitwise has however responded, and has promised to look into all the issues raised and re-file at a later time.
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