The US Securities and Exchange Commission (SEC) on Wednesday announced a negative verdict on the application for the launch of the Bitcoin Asset Management Bitcoin ETF, drawn up in collaboration with the NYSE Arca trading platform. 

According to the regulator, the proposed tool does not meet legal standards to prevent market manipulation and other illegal activities. 

“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 Section 6(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,” the regulator said. 

Bitwise and NYSE Arca have applied for the launch of the Bitcoin ETF in January.  Another similar proposal, drawn up by VanEck and SolidX, was withdrawn in September.  To date, the SEC has no active ETF applications related exclusively to bitcoin.  An application by Wilshire Phoenix, which proposed to include US Treasury securities in addition to bitcoin, in order to reduce instrument volatility, is still awaiting consideration. 

Bitwise Asset Managemen published a comment on the refusal of the SEC. 

“Though “disapprove” doesn’t seem positive, this is a productive step in the journey toward a regulated crypto ETP,” they wrote on Twitter. 

Bitwise notes that the regulator’s doubts about the possibility of manipulation in the Bitcoin market were the main reason for the refusal. 

“ We’re optimistic about this & how the market has matured on this front in just the past 2 yrs.  But there’s more to be done,” they add. 

In the future, the company intends to continue working with SEC to provide data and analytical materials that shed light on the cryptocurrency industry and its development. 

“The 112-pages today show the areas of focus.  We’ll re-file when the time is right,” the company concludes. 

Author: Marko Vidrih