Bitcoin ETF proposal suffers another rejection, as the United States Securities and Exchange Commission rejects the proposal of three cryptocurrency exchanges. The rejection gives the expectation of cryptocurrency ecosystem a setback.
The Reasons For The Bitcoin Rejection By SEC
Another rejection trails the proposal of Bitcoin ETF after the Winklevoss Twins’ Gemini exchange proposals have been rejected twice. The new rejection according to the Securities and Exchange Commission (SEC) was based on guiding the cryptocurrency volatility and manipulation.
ProShares, Direxion, and GraniteShares made the ETF proposals. These rejections are joining a list of others that Bitcoin ETF has suffered in recent past. The volatility and the fraud associated with cryptocurrency has made the institutions and government to be wary of delving into cryptocurrency.
In contrast, the hope of finding a solution to the inherent problem of volatility and fraud is dependent on the cryptocurrency acceptance by the institutions and government; according to the view of most cryptocurrency enthusiasts.
In response to these latest rejections, the SEC mentioned that its opinion “does not rest on an evaluation of whether Bitcoin or blockchain technology more generally, has utility or value as an innovation or an investment.” Rather, the rejection had to do with concerns of insufficient measures taken “to prevent fraudulent and manipulative acts and practices.”
The SEC further elaborated in the rejection release, that “the listing exchange must enter into a surveillance-sharing agreement with a regulated market of a significant size because such agreements provide a necessary deterrent to manipulation because they facilitate the availability of information needed to investigate a manipulation if it were to occur fully.”
For the Bitcoin ETF to be approved there is a need for a surveillance-sharing agreement with a regulated market of significant size. The companies have failed to meet up with the requirements of SEC for their requests to have qualified for approval, as the same reasons were cited for the rejection of the Winklevoss Twins proposal.
The Impact of Another ETF Rejection and The Process For Approval
Cryptocurrency enthusiasts await the approval of Bitcoin ETF by the United States Securities and Exchange Commission. The approval is seen as the primary catalyst for the reversal of the bearish trend of cryptocurrency.
The determinant of the rise in the value of cryptocurrency has received another blow. However, cryptocurrency enthusiasts are still optimistic about the surge.
After two Bitcoin ETF rejection by the SEC, the Winklevoss twins have resorted to the creation of a cryptocurrency-based organization which will aid the legalization and self-regulation of virtual currencies. As purposed by the twins, the organization that already boasts of four significant exchanges as members will see to the mainstream acceptance of cryptocurrency.