It also outlines and dissects the various claims made by Bitwise in its own research submitted to the Securities and Exchange Commission about the robustness of trading on venues that don't fake volumes, which was released in March. The agency also pushed back on some of Bitwise's claims in its proposal, including that bitcoin's "unique properties" - fungibility, transportability, an exchange-tradability -make it less susceptible to manipulation. "Because, among other things, the Sponsor has asserted that 95% of the bitcoin spot market consists of fake and non-economic activity, but has not established that it has, in fact, identified the “real” bitcoin market, or that the “real” bitcoin market is isolated from the fraudulent and manipulative activity, we find, in each case, that NYSE Arca has not met its burden to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and therefore the Commission disapproves this proposed rule change," the agency wrote in its more than 100-page rejection letter. Bitwise has tried to mollify the agency's concerns by pointing out the marketplaces in crypto with legitimate volumes, but the SEC said the firm doesn't explain how legitimate exchanges are isolated from exchanges cooking their order books. The denial of the fund follows the rejection of VanEck's similar bitcoin ETF last month.Ĭompanies, including the likes of Winklevoss Capital and Realty Shares, have tried to get an ETF tied to the crypto market off the ground, but regulators have pushed back because of concerns about manipulation. 28, and in March the commission granted a longer period to consider the new product. It was originally filed with the agency on Jan. The final application for an exchange-traded fund tied to the cryptocurrency has been denied by the Securities and Exchange Commission, according to a document on the agency's website.īitwise's Bitcoin ETF Trust would have tracked the spot price for bitcoin had it been approved.
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