Bad news for digital currency prices, granted that the Securities and Exchange Commission once again rejected the proposal to list a cryptocurrency exchange-traded fund on the Gemini exchange. The proposal, which was rejected in a 3-1 vote, was made by twins Tyler & Cameron Winklevoss, founders of the Gemini exchange and famous for their legal battle with Facebook.
According to Commissioner Hester Peirce, “her cause of concerns on the Commission’s approach that undermines investor protection by prohibiting greater institutionalization of the bitcoin market. More institutional participation is likely to revolutionize many of the Commission’s concerns with the bitcoin market that cause its disapproval order. More generally, the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of Bitcoin ETPs.”
It is believed that the SEC rejected the proposal because the Gemini exchange failed to prove that it is resistant to manipulation. Additionally, officials also stated that there are several issues regarding investor protection and fraud, which are yet to be solved. According to the SEC, its mission is to protect investors and reduce the number of manipulative and fraudulent acts that would hurt the financial industry.
Not long ago, there were several rumors suggesting that it is likely for the SEC to approve a Bitcoin-based ETF. This quickly led to an increase in Bitcoin exchange rates, which hit a two-month high of approximately $8,300. Following the rejection, the price dipped to $7,880. At the time of writing, a few applications for different Bitcoin ETF’s are still active. The VanEck and SolidX Bitcoin Trust published their application on the 2nd of July. According to current rules, the SEC needs to respond until the 16th of August. The commission has also postponed debates on five other proposals, therefore the market is unsure whether these ETF’s have chances of being approved.
Based on everything that has happened so far, it will likely take a bit longer before cryptocurrency ETF’s are going to be approved by the SEC. However, attempting to apply in other countries may be a viable solution.
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