SEC Denies Winklevoss Bitcoin ETF, SEC Commissioner Officially Dissents With Ruling

The SEC has announced the rejection of the Winklevoss twins application for a Bitcoin ETF, marking the second time a crypto exchange-traded fund application by the Gemini exchange founders has been denied.

The rejected Winklevoss-driven ETF is based on a two-year-old Bitcoin ETF proposal - the first rejection of the Winklevoss ETF occurred in a market environment in which the regulatory climate surrounding cryptocurrencies was arguably less mature than the present.

While the Winklevoss Bitcoin ETF may have been rejected, there are several alternative Bitcoin ETF proposals currently under consideration by the SEC that address SEC concerns of manipulation in an entirely different manner.

Where the Winklevoss Bitcoin ETF proposal suggests that manipulation is unlikely given the distributed, global nature of cryptocurrencies, the VanEck Bitcoin ETF proposal instead presents a solution that incorporates OTC purchases from regulated institutions that perform extensive AML and KYC. Furthermore, the VanEck ETF will be subject to the same Cboe surveillance rules as derivative products and Commodity Trusts and is backed by insurance to prevent security issues.

As the VanEck proposal is targeted toward qualified institutional investors, the cost and difficulty associated with manipulation is far higher - presenting the SEC with a comprehensive solution to the problems it perceives to be present in the Winklevoss ETF proposal.

"I am concerned that the Commission's approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission's concerns with the Bitcoin market that underlie its disapproval order."

One of the highly anticipated SEC rulings on the future of Bitcoin exchange-traded funds has been delayed until September, extending the time frame in which the regulatory body must provide a decision on the filings of five Bitcoin ETFs.

The SEC has recently been flooded with a number of Bitcoin ETF filings, including proposals from VanEck and SolidX, which have not been postponed.

The Direxion Bitcoin ETF filings, put forward by the New York Stock Exchange on January 4, request a rule change in order to provide investors with the opportunity to "Obtain daily short, leveraged long or leveraged short exposure to the lead month Bitcoin futures contract" on the CBOE, the CME, or any US exchange that trades Bitcoin futures contracts subsequent to the filing.

While the Direxion Bitcoin ETF filings may have been delayed, the cryptocurrency market has recently experienced a positive price shift due to an increase in bullish sentiment associated with the upcoming SEC ETF ruling.