On August 22, local time in the United States, the US Securities and Exchange Commission (“SEC”) announced that it had rejected a total of nine Bitcoin ETF applications from ProShares, Direxion, and GraniteShares. Affected by this news, Bitcoin quickly fell more than 200 US dollars, and other digital currencies also showed varying degrees of decline.
The SEC has been worried about the market regulation and market manipulation of Bitcoin. “Daily Economic News” reporter learned that at the end of July this year, the US Securities Regulatory Commission rejected the application of the Bitcoin brothers’ Bitcoin ETF after the retrial.
SEC rejects 9 Bitcoin ETF applications
On August 22 (Wednesday), according to the Wall Street Journal, the SEC rejected nine applications for Bitcoin ETFs.Affected by this news, bitcoin prices fell from over $6,600 in the morning and quickly fell to around $6,400 in the afternoon, falling more than $200.
Later in the day, the SEC announced the specific application requirements of the three companies ProShares, Direxion, and GraniteShares. Representatives of the three companies currently refuse to comment on the matter.
The “Daily Economic News” reporter learned that the funds submitted by the nine bitcoin ETFs submitted this time are different from the previous ones. They are all linked to the Bitcoin futures market and are not funds that directly hold physical Bitcoin.
The reason for the SEC’s rejection is the same as before. The SEC is concerned that it cannot effectively regulate and combat market manipulation and fraud in Bitcoin transactions. Bitcoin companies and exchanges cannot prove that they have such capabilities.
According to CNBC, ProShares is an ETF application filed on the New York Stock Exchange (NYSE). However, the SEC believes that the NYSE failed to meet the requirements of “national stock exchanges should establish rules to prevent market fraud and manipulation”. The exchange did not provide direct evidence that the bitcoin futures market is large enough to prevent market manipulation from being somewhat to some extent.
The SEC stressed that refusing these applications is not a denial of the value of bitcoin or blockchain technology, nor does it deny the value of its innovation and investment.
In recent years, major institutional investors have become interested in cryptocurrencies such as Bitcoin.
The Chicago Board Options Exchange (Cboe) and the Chicago Mercantile Exchange (CME Group) both issued bitcoin trading futures at the end of 2017. This time, the SEC rejected the ETF application of nine bitcoin trading companies to bring a big blow to both.
Bitcoin is growing rapidly but lacks effective regulation
On January 3, 2009, Nakamoto published the first version of the open source Bitcoin client, marking the birth of Bitcoin. In the 10 years since the launch of Bitcoin, it has developed very rapidly. However, Bitcoin’s trading market is still in a young stage, which is rather confusing, lacks effective supervision, and often exposes scandals such as market fraud, market manipulation, and hacking.
At present, the SEC does not recognize the saying that Bitcoin naturally has the ability to resist market manipulation, and believes that the sharp rise in the price of 2017 Bitcoin is caused by market manipulation.
In recent years, many Bitcoin companies have submitted applications for bitcoin ETFs to the SEC, but they have all been rejected.
In April 2013, the Wenkleworth brothers claimed that they had 1% of the amount of Bitcoin in circulation at the time, worth more than $1 billion. They first submitted a Bitcoin ETF application to the SEC through the Gemini Bitcoin Trading Company, which was founded in 2014. It is reported that this is the first ETF application for Bitcoin.
In March 2017, after a long review, the SEC rejected the application. Although the Wenkleworth brothers submitted a petition requesting an SEC review, they were still rejected.
According to CNBC, the SEC again rejected the application of the Bitcoin ETF at the end of July.
Although many Bitcoin companies’ ETF applications have been rejected, the SEC still has pending applications for approval from other exchanges.
Earlier, Coinspeaker reported that in June of this year, asset management company VanEck and cryptocurrency startup SolidX formed a VanEck SolidX Bitcoin Trust to submit a Bitcoin ETF application to the Chicago Board Options Exchange. In July of this year, Bitwise also submitted an ETF application to track a basket of digital currencies.
The SEC said that VanEck SolidX’s ETF application will be delayed until September 30th.
“The SEC’s approval of the ETF is only a matter of time,” said Fatfish Group CEO Kin-Wai Lau in a previous interview. Many financial experts also believe that it is no surprise that the SEC has rejected the ETF application, and it may not be until 2019 that the situation will change.
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