In October, the U.S. Securities and Exchange Commission (SEC) rejected Bitwise Asset Management and NYSE Arca’s proposal for Bitcoin ETF due to the decision that the firms failed to meet the necessary requirements. That said, as per news outlet, Cointelegraph, the commission has decided to revisit their case.
Besides not having met the requirements previously, it seems like the regulators fear two things: market manipulation and fraudulent activities, both of which will be heavily investigated upon. The SEC wrote at the time:
“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca 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 Exchange Act Section6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices.”
Although the commission has decided to give the proposal another look, this doesn’t mean that the rejection is lifted. In the time it takes to review the Bitcoin ETF, Bitwise and NYSE Arca’s proposal will remain rejected.
That said, the SEC has since invited those who are interested in filing “a statement in support of, or in opposition to, the action made pursuant to delegated authority [by December 18, 2019].”
As for when the SEC will be comfortable approving Bitcoin ETFs, the news outlet referenced CEO of the decentralized financial network, Findora, Charles Lu, who shared that garnering SEC’s approval rests in proving that “real price discovery is happening as opposed to market manipulation.” Until then, the wait for a Bitcoin ETF will have to continue!