Bitcoin ETF: SEC gives Bitwise application second chance

At the beginning of October, the US Securities and Exchange Commission gave preliminary approval to the Bitcoin ETF application from IT company Bitwise and the NYSE Arca Stock Exchange. Now the Security Exchange Commission (SEC) wants to re-examine its decision.

This is clear from a SEC statement issued on 18 November. This indicates that they had previously informed the New York Stock Exchange NYSE Arca – where the Bitwise Bitcoin ETF is to be traded – in advance in a letter on the review of the decision.

With this letter, we would like to inform you that, in accordance with Rule 431 of the Commission's Rules of Procedure 17 CFR 201.431, the Commission will review the measure ordered. In accordance with Rule 431 (e), the order of 9 October 2019 will be suspended until the Commission orders otherwise. The secretary's office will inform you of any appropriate measures taken by the Commission,

it says in the letter dated 15 October.

Bitwise Bitcoin ETF: Background of rejection

On October 9, the SEC had still decided against the approval of Bitwise Bitcoin ETF. Here the authority relied on the risk of market manipulation at Bitcoin. Thus, the SEC dismissed the reasoning of Bitwise. According to him, Bitcoin has unique properties that set it apart from other commodities and made it "inherently tamper resistant".

According to this, Bitcoin is a special asset, above all because of its fungibility, its transportability and its "marketable tradability". The SEC's concerns that the Bitcoin market was still vulnerable to manipulation could not dispel Bitwise.

(…) the Commission concludes that the sponsor's concessions (Bitwise) that 95 percent of the reported Bitcoin trade is "counterfeit" or not economic (including wash trading or simply fabricated trade), (…) to the finding lead that the properties of Bitcoin do not make it fundamentally tamper-proof.

This would also corroborate a look at past cases of market manipulation on a large scale.

Also the statement that Bitwise uses a market segment for the pricing of the Bitcoin ETF, which is "completely free of wash trading and the like" as opposed to 95 percent of the Bitcoin spot market, could not convince the SEC:

The sponsor claims that 95 percent of the Bitcoin spot market consists of counterfeit and non-economic activities (133), but has not demonstrated that the "real" Bitcoin market is isolated from this fraudulent and manipulative activity,

it says in the reasoning to reject the Bitwise ETF. The rejection of the application remains valid until its revision.

SEC gets more feedback

What has moved the SEC to change its mind, however, is unclear. A rationale for their decision to reapply Bitwise Bitwise ETF from Bitwise is not provided by the agency in its communication. It is certain that the SEC employs Commissioner Hester M. Peirce, an outspoken Bitcoin advocate. A circumstance that earned her the nickname "Crypto Mom" ​​from the crypto community. By 18 December, individuals and institutions may file their case for or against the Bitwise Bitcoin ETF. There are no deadlines for revisions to SEC regulations, so a final ruling by the authority is unlikely to be expected for the current year.

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Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO , and should not be attributed to, CriptomonedaseICO .

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