The U.S. Securities and Exchange Commission (SEC) created quite an upset for cryptocurrency enthusiasts a day before the mentioned date of decision for the two Proshares Bitcoin (BTC) ETFs. It ruled the Proshares Bitcoin ETFs, not in favour, but that was not all!
Along with the Proshares BTC ETF, seven other ETF’s which included five from Direxion and Two from GraniteShares was rejected. The rulings for the Direxion and GraniteShares ETF’s came almost a month prior to the deciding date.
The SEC highlighted the same reasons for all three BTC ETF’s. The statement was as follows;
“[T]he Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 the Exchange Act Section 6(b)(5), in particular, the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
The keywords in the above reason are, ‘fraudulent and manipulative acts and practices.’ The same statement was made at the rejection of the Winklevoss ETF last month, July.
The statement further added;
“Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’ That failure is critical because, as explained below, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary.”
This statement highlights the fact that the Exchange has no recorded evidence to show that Bitcoin Futures is of ‘significant size.’
However, the bloodbath of the markets was not as bad as when the Winklevoss Twin’s BTC ETF was disapproved. The rejection on August 22 2018 did not affect the markets.
For two reasons;
- A well known Bitcoin advocate, Andreas Antonopoulos called the Bitcoin ETF a terrible idea.
- Bitcoin Tracker One which is an Exchange Traded BTC Note was made available and acted similarly to a BTC ETF.
As Twitter user ‘Philip Nunn’ tweeted rightly –
7 ETF’s rejected #crypto exchanges banned in China
And the market moves ZERO.
— Phillip Nunn 🚀 (@PhillipNunnUK) August 23, 2018
The next ETF to be debated is the CBOE VanEck / Solidx on the 30th of September or most probably a few days earlier given how past events of BTC ETFs have played out. However, this will be the second hearing, and the final decision will be made on the 27th of February 2019.
What do you think will happen in the next ETF decision? Will the SEC give in and agree or will the BTC ETF’s be part of the history books for Bitcoin. Leave us a comment below.