US SEC With Another Look At Rejected Bitwise ETF Proposal

The United States Securities and Exchange Commission is in the latest Bitcoin news. As we can see, the US SEC commission is reviewing its decision to reject the Bitcoin (BTC) exchange traded fund (ETF) filing from Bitwise Asset Management and NYSE Arca.

An official announcement shared on November 18 shows that the commission said that the ETF filing from Bitwise Asset Management and NYSE Arca will return to review the proposal, following the earlier rejection which did not meet the necessary requirements.

In October, the US regulators noted that the applicants did not meet the necessary requirements regarding possible market manipulation as well as illicit activities. As the US SEC commission 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.”

We can clearly see that one of the US SEC commission’s main concerns when evaluating new commodity-based ETFs is to determine whether the underlying market is resistant to manipulation. In the order which rejected the Bitwise ETF application, the commissioners clearly wrote that the evidence insufficiently supports the claim that the “real” spot market for Bitcoin – when “fake and/or non-economic data is removed” – is sufficiently resistant to manipulation.

Today, the regulator announced that it is currently reviewing the proposal once again. As the US SEC commission noted, any party or person may file a statement in opposition to (or in support of) the action that was made pursuant to the delegated authorities. The statements, however, must be filed no later than December 18, 2019.

Many analysts are setting timelines for the first cryptocurrency and Bitcoin ETF approval which is seen as something that will shake up the industry in a positive way and provide a lot of benefits for it. Industry professionals seem to have a certain level of optimisim believing that at some point, the US SEC commission will have to approve a Bitcoin ETF.