On Thursday, July 26th, BTC price went below $8,000 after the news of the refusal of the Winklevoss brothers by the SEC for creating Bitcoin-ETF.
The Winklevoss brothers have long been seeking the opening of the Winklevoss Bitcoin Trust, back in June 2016, sending for this purpose an application for changes in the rules of the BATS Global Exchange, to which the shares of the fund should be traded.
The first rejection was made in March 2017, and as explained in the SEC, changes in the rules of the stock exchange cannot be accepted, because in its majority bitcoin-markets are unregulated. In addition, the Commission said at the time, BATS Global Exchange (BZX) did not and can not at the moment enter into a monitoring agreement similar to those that have been concluded for all previously approved exchange products in order to prevent manipulation and fraud.
Shortly after receiving the refusal, BZX appealed against this decision and also submitted additional comments to the Commission. All this time the discussion on the readiness of the regulator to approve the exchange product for trading bitcoin did not abate.
Nevertheless, as evidenced by the new document, the risks that the Commission pointed out earlier still concern the regulator.
At the same time, it is noted that this decision can not be considered as an assessment of the cryptocurrency and the blockchain-book as a whole and refers exclusively to the structure of the Winklevoss Bitcoin Trust.
“Although the Commission does not approve the proposed amendment of the rules, it emphasizes that its disapproval is not based on evaluating bitcoin or blockchain technology in a broader sense or their value as innovation or investment. The Commission does not approve the proposed amendment of the rules, as BZX could not confirm that its proposal is consistent with section 6 (b) (5) of the Exchange Act, which specifically states that the rules should be drawn up in such a way as to discourage acts of fraud and manipulation and appropriate practices, ” was said in the document.
At the same time, the SEC reiterates that it does not exclude the possibility of approval of such a product in the future and that with time regulated bitcoin markets “can continue to grow and develop.”
“For example, existing or new bitcoin futures can reach significant sizes, and the exchange listing such products will be able to demonstrate in the proposed rule change its ability to resolve risks of fraud and manipulation by providing information on monitoring to a regulated market of significant sizes associated with bitcoin, and also, where appropriate, spot markets associated with bitcoin-derivatives, “the regulator said.
If this happens, “the Commission will have the opportunity to decide whether the stock bitcoin product meets the requirements of the Exchange Act.”