Thursday, July 26 might go down as a severe setback for the prospect of bitcoin exchange-traded funds (ETFs). For the second time, the same major trust applying for bitcoin ETF approval was rejected by the United States Securities and Exchange Commission (SEC). SEC Release No. 34-83723, File No. SR-BatsBZX-2016-30 formally denied the Winklevoss Bitcoin Trust ability to list and trade shares. The decision comes amidst high levels of optimism toward bitcoin ETF approval as soon as next month. At least one SEC official does not agree with her colleagues’ decision.
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Bitcoin ETF Rejected by SEC, Commissioner Dissents
The SEC published its decision to deny a major bitcoin trust the ability to list and trade shares as an ETF. In a 92 page explanation, the US’s primary regulator of such markets rejected a rule change at the behest of Bats BZX Exchange. The proposed change would have allowed bitcoin tethered investment products.
Bats BZX finds itself in nearly the exact same position as last year, when it was rejected the first time. On appeal, Bats’ petitioning brought with it robust public commenting in hope of changing the agency’s mind.
Perhaps a positive indication for enthusiasts is how the SEC stipulated to not have prejudice necessarily against cryptocurrencies. Their latest decision places blame on the proposal rather than its particular elements. Though it is rejecting the application and rule change, “the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment,” the SEC assured.
They’re kicking back the rule change “because, as discussed in detail below, BZX has not met its burden under the Exchange
