Within hours that the SEC announced that it has discarded a planned bitcoin ETF submitted by the Winklevoss Twins, the bitcoin price curved in below the $8,000 mark and is now at present teetering back and forth across that psychologically-important level.

About the ETF

The statement comes after the SEC reviewed the request a second time, subsequent an appeal from Gemini co-founders Cameron and Tyler Winklevoss. The SEC also opened up a clean round of public remark for this second review. The early application was rejected on March 10, 2017.
The Winklevoss’ adapted parts of the application the SEC highlighted as challenging during the first review. The SEC performed a complete “de novo” review with the revised application, meaning the regulators treated it like a product new application.

Reasoning Behind the Rejection

The Bats Exchange ETF, with the ticker symbol BXZ, was one of the first to present an claim to the SEC in 2017. When deciding on whether to accept a new ETF or substitute investment, the SEC follows Exchange Act Section 6(b)(5).
The chief points from this regulation that the SEC measured for the BXZ ETF was whether the swap over had the ability “to prevent deceptive and scheming acts and practices” and “to protect investors and the public attention

The points of argument, according to the SEC, were that bitcoin did not supply the safety against exploitation as a plus point class and that the technology did not provide adequate tools for preventing fraud and money laundering. The complexities of blockchain technology required a rule alteration to the Securities Exchange Act. The lumber of confirmation for a rule change fell on the applicants.

The Winklevoss’ Arguments Made a Strong Case

To battle the SEC’s comments on the first rejected, the new application affirmed:

The geologically diverse and incessant nature of bitcoin trading makes it difficult and prohibitively expensive to manipulate the price of bitcoin”13—and that therefore the bitcoin market “generally is less vulnerable to manipulation than the fairness, fixed income, and commodity futures markets.