SEC Rejects Winklevoss Brothers’ Bitcoin ETF


The U.S. Securities and Exchange Commission has just rejected the request for regulatory amendment that would have made possible the creation of the first Bitcoin ETF: “… the Commission disagrees with the proposed amendment of the rules because it considers that the proposal is not in conformity [ To the Exchange Act, which requires, among other things, that the rules of a national stock exchange must be designed to prevent fraudulent practices and manipulations and to protect investors and the public interest.

The Commission considers that, in order to meet this standard, an exchange that trades stocks of exchange-traded commodities must, in addition to the other applicable recommendations, satisfy two requirements that are decisive in this respect: First, the exchange Must have monitoring and information sharing agreements with the major markets in which the underlying product or any other derivative thereof is traded. Secondly, these markets must be regulated.”

Nevertheless, the SEC leaves an open door to future financial instruments indexed on Bitcoin:

“The Commission notes that Bitcoin is still in a relatively early stage of development and that, over time, large regulated markets could emerge. If such contracts were to develop, the Commission could, on the basis of the facts and circumstances then presented, reconsider the compatibility of a bitcoin ETP with the requirements of the Exchange Act. “


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