[BREAKING]: SEC Denies ProShares Bitcoin ETF (Exchange-Traded Fund)

The SEC issued a flurry of denials late on Wednesday, denying the Direxion ETFs, the ProShares ETFs, and the GraniteShares ETF.

ProShares had initially proposed two separate ETFs, GraniteShares had proposed two ETFs, and Direxion had proposed five ETFs. All nine ETFs have now officially been denied.

In separate documents, the SEC revealed that they were disapproving a rule change that would have allowed the bitcoin ETFs to be listed and available for trading on NYSE Arca.

The SEC decided not to change that rule, which means they’re officially denying the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF.

Markets are not currently reacting strongly to the news. Few analysts expected any of these ETFs to be approved. Out of the 9 ETFs, however, the ProShares ETF seemed to have the highest chance of approval.

Both ETFs worked differently from the VanEck SolidX Bitcoin Trust ETF that has also been making its way through the regulatory system. That ETF is physically backed by bitcoins. The ProShares ETFs, meanwhile, are backed by bitcoin futures contracts.

The SEC published the proposed rule change for comment in the Federal Register on December 26, 2017. The organization had until August 23 to decide on the proposal. They’ve officially made the decision as of August 22.

The ProShares ETF denial, like the Direxion ETF denial, contained some good news for crypto fans and the blockchain community. Although the SEC is denying these ETFs today, they’re not denying them because they hate bitcoin. This rejection shouldn’t be seen as an indictment of blockchain:

“This order disapproves the proposed rule change. Although the Commission is disapproving this proposed 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.”

Instead, the SEC decided to disapprove the proposed rule change because the rule change has not met its burden under the Exchange Act and the Commission’s Rules of Practice.

One of the biggest problems the SEC had with the proposal is that they feel markets are not of significant size in order to prevent market manipulation. This problem is exacerbated by the fact that the SEC feels insufficient protections against fraudulent and manipulative acts are in place to protect investors from market manipulation.

The SEC released a similar statement regarding the GraniteShares ETF. That ETF, which also would have traded bitcoin futures, was denied due to similar concerns of market manipulation.

It was always unlikely for the ProShares, GraniteShares, and Direxion ETFs to be approved, and few people expected approval. Although this appears to be bad news for the crypto community, markets aren’t currently plummeting as they have with previous ETF denials.

Although the SEC denied nine ETFs today, they have another ETF scheduled to be approved or denied. The SEC has until September 30, 2018 to approve, deny, or delay the most promising ETF in the space: the VanEck SolidX Bitcoin Trust ETF. That could be a historic day in bitcoin history – or just another disappointment.

“SEC Approves First Ever Bitcoin ETF” – What a Crypto Exchange Traded Fund Could Mean for the Industry

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide