Bitcoin investors to wait longer for Bitwise ETFs after SEC approval hits another snag
The Securities and Exchange Commission (SEC) has once again rejected Bitwise's proposal for creating Bitcoin-backed exchange-traded funds (ETFs). This comes a few days after Bitwise's global head of research Matt Hougan said that the SEC will have to make a decision this time round to break away from the normal rhetoric of postponing the judgment.
Bitwise launched the bid to have Bitcoin ETFs in January 2019 but has been forced to delay the rollout following SEC's postponement of the ruling on ETFs till now when the judgment has been made.
Most investors had hoped for the approval of the ETFs, which would open a better cryptocurrency investment opportunity than trading. Bitcoin ETFs would practically allow investors to invest in Bitcoin without having to physically hold the digital currency.
Nevertheless, the SEC went ahead to clear the air when it comes to the reason why it rejected Bitwise's ETF’s proposal. It pointed out that Bitwise Asset Management and NYSE Arca did not meet all the requirements of the Exchange Act. Furthermore, the SEC also noted that the Commission's Rules of Practice to demonstrate that the proposal is consistent with the requirements of Exchange Act Section 6(b)(5) had not been followed. In particular, the SEC pointed out that there were no rules designed to prevent fraud and market manipulation by the exchange.
The clarification came as a relief for most cryptocurrency experts because most of them were worried about the ETF decision since there are still arguments whether Bitcoin, as well as other cryptocurrencies, have utility or value as innovations or investments. Actually, the SEC said this was not the reason for the rejected proposal.
In a response to the rejection, Hougan said that the detailed feedback from the SEC would help Bitwise fine-tune the areas of concern. Hougan also said that they looked forward to re-filing the proposal once they tweaked the points that the SEC had highlighted.
In a wider perspective, the SEC's decision has most likely set the path for other issuers such as Cboe Global Markets, VanEck, SolidX and others that had given up following the government's shutdown in January 2019.
At least Bitcoin ETF issuers are now aware of what is required for the ETFs to fully comply with the laws and regulations. Therefore, it shall not be too long before we witness the first-ever EFT welcomed by Wall Street.
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