The United States Securities and Exchange Commission (SEC) is reviewing its decision on the Bitcoin (BTC) exchange-traded fund (ETF) proposal submitted last month by Bitwise Asset Management and NYSE Arca. At that time, the financial regulator cited fear of market manipulation and fraudulent activities as the reason for rejecting the ETF.
According to an official announcement on November 18th, the SEC has made a decision to revisit is ruling on the ETF proposal filed by the Bitwise Asset Management and NYSE Arca. Previously, the commission had rejected the ETF on the grounds that it did not meet the necessary requirements, highlighting the risks that the ETF poses for the market as well as for investors.
At that time, SEC explained:
“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca 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 Exchange Act Section6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices.”
At the time that Bitwise’ ETF was rejected, Bitwise tweeted that “though ‘disapprove’ doesn’t seem positive, this is a productive step in the journey toward a regulated crypto ETP.”
However, it remains unclear as to why the commission has decided to review its decision. Nevertheless, SEC commissioners have the possibility to review decisions following the filing of a petition, or at their own discretion.
Bitwise’s head of research, Matt Hougan, has denied that the company submitted a request for a review, explaining that it was not seeking to overturn the commission’s decision, however the company remains open to dialogue and welcomes the opportunity to submit comments.
Following this, any party or person may file a statement in support of, or in opposition to, the action made pursuant to delegated authority, no later than December 18th, 2019.
Until then, the order to reject the proposed listing of the ETF filing from Bitwise Asset Management and NYSE Arca will remain in effect pending the Commission’s review.
Previously, the SEC reviewed the rejection of the Bitcoin ETF application submitted by Cameron and Tyler Winklevoss, founders of the Gemini exchange; after more than a year passed the rejection was ultimately upheld.
The review of the Bitwise application could result in a similar outcome. Indeed, a number of experts have speculated that years may pass before the SEC would consider approving an ETF application.
Meanwhile, the SEC has yet to approve an ETF proposal. Currently, ETF veteran Kason Toussaint and Kryptoin Investment Advisors are waiting for SEC’s decision on their own proposal, which was submitted a couple of months ago. Accordingly, the ruling is set to be made next month.