US SEC rejects latest proposal to create Bitcoin ETF

Tencent Securities reported on October 10 that the U.S. Securities and Exchange Commission (SEC) once again rejected the proposal to create a Bitcoin-backed ETF.

The SEC stated:

“Its opposition is not based on an assessment of Bitcoin or blockchain technology more generally and whether Bitcoin has utility or value as an innovation or investment,” but rather that “NY Arca Securities has failed to meet its burden under the Exchange Act and the Commission’s rules of business to demonstrate that its proposal complies with the requirements of Section 6(b)(5) of the Exchange Act, specifically, that the rules of a national securities exchange are ‘designed to prevent fraudulent and manipulative practices.’”

The SEC has yet to approve a bitcoin ETF, which would allow investors to invest in the digital currency without actually buying or storing it, citing concerns about fraud and manipulation - a sign of the huge regulatory hurdles facing cryptocurrency investing.

Last month, VanEck pulled a bitcoin ETF for the second time this year.

Cryptocurrency index fund provider Bitwise launched a proposal to establish a Bitcoin ETF in January this year, and the SEC's ruling has been repeatedly delayed. Bitcoin bids will be stored by a regulated third-party custodian, and its tracking price will be based on multiple exchanges.

After the announcement, the price of Bitcoin stabilized immediately. Bitcoin was last trading at around $8,610, up 5% in the past five days, but down 31% in the past three months. Despite the plunge in Bitcoin this summer, it is still up 132% so far this year. (Trest)

Source: Tencent Finance