The US Securities and Exchange Commission (SEC) rejected the application for a bitcoin ETF from Bitwise last night.
Bitcoin ETF seems further away than ever
“A bitcoin ETF is closer than ever” exclaimed Bitwise’s Matt Hougan early this week. And his argument was not that bad. Unfortunately, the SEC decided that the application did not meet legal requirements to prevent market manipulation or other illegal activities.
Concerns about market manipulation and fraudulent activities
The application has been officially submitted by Bitwise Asset Management in collaboration with NYSE Arca. If you want to look for a guilty person in a situation like this, the latter seems to be the bitten dog. The SEC placed the burden on NYSE Arca.
The reasons quoted by the SEC are cause for concern. All bitcoin ETF applications that have so far been assessed by the SEC have been rejected due to concerns about market manipulation and fraudulent activities.
Bitwise tried to remove all these concerns by doing a lot of research and sharing reports about the bitcoin market.
Detailed Report
To date, the SEC has rejected all bitcoin ETF proposals, citing market manipulation and concerns about fraudulent activities. If you have the time, it is definitely advisable to dive into this. You can find the report on the website of the SEC.
An interesting conclusion is that of the 81 exchanges, only 10 are honestly sharing their real trading volume. These are Binance, Bitfinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex and Poloniex. According to the report, the other stock exchanges are exaggerating their trading volume so that they can request more money for offering altcoins and ICOs.
Reason for rejection
The SEC’s rejection states:
“The Commission rejects this proposed rule change because, as discussed below, NYSE Arca has not demonstrated its burden under the Exchange Act and the Commission’s Rules of Practice that the proposal complies with the requirements of the Exchange Act, section 6 (b) (5) and in particular the requirement that the rules of a national stock exchange are designed to prevent fraudulent and manipulative acts and practices. “
Only one left
The proposal was already submitted in January of this year. Bitwise wanted to be the first company to offer an ETF in the US. It seemed like a race against the clock, because competitor VanEck submitted a similar proposal in the same month.
However, VanEck withdrew last month.
Due to the rejection, all hope for a bitcoin ETF is currently focused on the request from Wilshire Phoenix and NYSE Arca.
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