Showdown: SEC Rejects 9 Bitcoin ETF Proposals
A lot of cryptocurrency traders and investors had looked forward to the verdict of the SEC with regards to ETFs. For some of us, this meant stocking up on our favorite crypto asset with the hope that the Security and Exchange Commission (SEC) approved any of the ETFs. Well, ETFs have been laid to rest for now and I believe this is a good thing for the market. Interestingly, the market didn’t really react to the news. And now for the news…
9 Bitcoin exchange-traded funds (ETFs) have been rejected by the U.S. SEC. The rejected bids came from Direxion, Proshares, and GraniteShares.
The rejection came a day to the much-anticipated deadline which was August 23. It came alongside a pair of BTC ETFs that had been submitted by ProShares in conjunction with the New York Stock Exchange (NYSE) ETF exchange NYSE Arca.
In respect to the proposal rejection, the SEC wrote in the case of ProShares that the commission is disapproving the proposed rule change due to the fact that 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.
Notably, the Commission gave the same reasons for the rejection of all the applicant.
The SEC in all instance stressed that it “accentuates that its disapproval does not rest on an assessment of whether bitcoin or blockchain technology generally has more utility or value as an innovation or an investment.”
The SEC reinforced its commitment to stop the inadequate monitoring and the problem of price manipulation rampant in the crypto market.
The Commission also noted that ETFs have not shown any evidence to prove that the Bitcoin future market would become a market of significant size. Also, exchanges have failed to prove to the Commission their willingness to set up strong regulations that can help battle scam in ETFs and the prevalent fraudulent and manipulative acts and practices.
Reacting to the rejection by SEC, major players in the market felt the action was an injury to investors and innovators. Hester Peirce speaking with CoinDesk stated that the decision of the commission to block Bitcoin and ETF was bad.
Still speaking on past issues cited by the commission for previous rejection. He stated that the disapproval orders for Bitcoin ETFs in the past needs a look at the language as it calls to bear to the justification used to strike down a proposal twice from investors Cameron and Tyler Winklevoss for their proposed bitcoin ETF.