The United States Securities and Exchange Commission (SEC) has rejected the Bitcoin ETF (exchange-traded fund) proposal from Bitwise Asset Management and NYSE Arca following repeated delays. Bitwise had initially filed the proposal for a rule change in January.
In the 112-page, in-depth statement released on Wednesday, the Commission states that the filing failed to meet the necessary requirements, particularly those related to market manipulation and illicit activities.
According to the decision,
“Rather, 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.”
Matt Hougan, managing director and global head of research at Bitwise, recently appeared on CNBC with a hopeful message about an approval, which would have made the Bitwise offering the first fully regulated Bitcoin ETF.
According to Hougan,
“We’re closer than we’ve ever been before to getting a Bitcoin ETF approved.”
Hougan has since issued a response to today’s rejection, citing a “clear pathway” to move forward.
“We deeply appreciate the SEC’s careful review. The detailed feedback they have provided in the Order provides critical context and a clear pathway for ETF applicants to continue moving forward on efforts to list a bitcoin ETF.
We look forward to continuing to productively engage with the SEC to resolve their remaining concerns, and intend to re-file as soon as appropriate.
Historically, the approval of novel exchange-traded products that open up new asset classes has required multiple years of regulatory engagement. What matters is continued progress and the investment of time from regulators, and that’s what we see here.”
Despite the rejection, the leading cryptocurrency is up over 4% at time of writing, hitting a high of $8,623, the first time at that level since September 24th. Down 31% over the past three months, BTC is up 132% year to date.
You can check out Hougan’s full remarks here.