Bitcoin has been taken a hit, ever since the SEC refused applications for a total of nine different Bitcoin exchange-traded fund (ETFs).
The applications to list and trade Bitcoin ETFs were made by Proshares, Direxion and GraniteShares and were all refused by the US regulatory agency.
The decision deadlines for Proshares was August 23rd whilst GraniteShares were due to get an answer on September 15th. The industry waited with baited breath to see what decision the SEC would come to, and many expected a drastic rise in BTC value if the outcome was favourable.
In each report published by the SEC, the agency stated the following:
“The Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 the Exchange Act Section 6(b)(5), in particular, the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
The SEC also added that none of the applications provided enough evidence that the BTC futures market was of a big enough size to warrant an approval.
The SEC did state however that their disapproval doesn’t rest on whether Bitcoin or blockchain technology has potential or value as an investment or innovation, meaning that there could be hope for future applications.
The latest rejections from the SEC are nothing new for Bitcoin as in 2017, they rejected a similar application from Cameron and Tyler Winklevoss and in July they rejected a further amendment made by the two brothers.
The agency stated that their reason for rejection related to issues around investor protection because, at the time, bitcoin was subject to fraud and manipulation carried out from offshore and unregulated markets.
Now all industry eyes are on the SEC as they wait for the outcome of the CBOE Bitcoin ETF proposal although many believe that they will hold off until 2019. In the meantime, CBOE has been active in working hard with the SEC to mitigate their concerns.