In another blow to the crypto sector as a whole, the U.S. Securities and Exchange Commission has once again disapproved of several proposals that had outlined the creation of novel bitcoin ETFs.
As per a story on CNBC, two of the new ETF proposals filed by ProShares were designed particularly to track bitcoin futures contracts. Similarly, two other similar proposals were submitted by GraniteShares, while five more ‘leveraged and inverse ETFs’ were pushed forth by Direxion.
It is also worth mentioning that all of these rejections have come nearly a month after the SEC denied the Winklevoss twins’ application for the creation of an ETF that would have allowed investors to trade physical bitcoin.
The Reasons Laid Out by the SEC
Upon inspection, the reasons delivered by the SEC for the aforementioned rejections seem to be quite similar to the ones handed out to the Winklevosses some time back.
For starters, the government body once again alluded to fears related to “fraud and manipulation of bitcoin markets”. Not only that, in relation to the Proshares Application, the SEC said that the filing was unsatisfactory and did not meet regulatory requirements that had been established by the body.
It then went on to add:
“A national securities exchange’s rules must be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.”
Final thoughts
After the disapprovals were handed out, the SEC let it be known that these latest rejections were not based on an ”evaluation of whether bitcoin or blockchain technology has value as an innovation or investment” but rather on independent analysis on each of the individual offerings themselves.
Till date, the SEC has not given the green light to any cryptocurrency-based ETF. However, there are still other applications in line that are waiting to be reviewed by the financial body. One of these applications has been filed by Bitwise and if approved, will allow investors to ‘track a plethora of cryptocurrencies“. The decision for this offering will, however, have to wait until the end of next month.
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