The Securities and Exchange Commission (SEC) has, on Wednesday, denied another high profile Bitcoin ETF Proposal from Bitwise.
The disproval by SEC is another strong indication that the agency wants to tighten its strong regulations on Bitcoin and other blockchain technology as much as possible.
Bitwise wanted to list its Bitcoin ETF Trust on the NYSE ARCA Exchange, but this disapproval will certainly put a halt to that at the moment.
The actual reason for the rejection, this time, does not have to do with the value or utility of Bitcoin as an investment or innovation.
The agency gave reasons for rejecting the ETF proposal. SEC rejected the proposal because the NYSC Arca exchange has not indicated that Bitwise’s proposal has met the Exchange Act section Requirement.
In particular, they have not met the requirements for the prevention of manipulative and fraudulent activities. So, the agency is still insisting that the firm should meet the legal before Bitwise’s proposal will be accepted.
Bitwise is still optimistic
In response to the agency’s refusal, the Global Head of Research on Bitwise Asset Management, Matt Hougan, said the firm had received the rejection in good faith.
The company will re-file as soon as they’ve got everything on track after reviewing their application.
He further noted that the Bitcoin market has continued to evolve in positive and important ways. He also mentioned some vital improvements in the market, especially the growth of $200 million daily market volume.
Besides, Hougan also mentioned the improved Bitcoin spot trading market as well as the development of Bitcoin’s trading custodians on a large scale.
Hougan pointed out that they are going to continue working on their platform and liaise with SEC until they reach the point where approval will be possible.
He opined that all stakeholders in the industry should work together to make sure Bitcoin and cryptocurrency have the safest platform for trading.
While he pointed out there are still legal issues to deal with, he also stated that they would scale through the remaining challenges and concerns.
A long way to go for SEC but the road is getting clearer
Sec Chairman Jay Clayton also asserted that the agency is getting closer each day. He says that in a very short time, the agency will be able to approve a Bitcoin ETF.
He revealed this in a CNBC interview earlier this month. He emphasized that the list of largely unregulated markets in the industry is affecting its growth.
But efforts are being made to make sure these prices in unregulated markets are “not subjected to significant manipulation.”
Bitwise first filed the ETF proposal in January this year. The firm is looking to become the first company, along with VanEck, to start up an ETF in the US.
The proposal was rejected because of some cases of market manipulation. We may see the firm filing its proposal again when they address these issues.
With Bitwise’s ETF proposal rejection, SEC only has to address one ETF proposal filed by Wilshire Phoenix.