Winklevoss Brothers honored for their second attempt to set up Bitcoin ETFs

Image source: pixabay - StartupStockPhotos

An honorable loss, is what I call it. Through this 2nd application made by the Winklevoss Brothers to the SEC for Bitcoin ETFs, revealed the shocking truth about SEC regulations. The Winklevoss Bitcoin Trust is one of the few ETF applications to be rejected by the SEC. The other ETFs are proposed by VanEck and SolidX and will be decided by SEC within a month, tentatively by 16th August.

Having no cryptocurrency based ETFs made available for retail investors is one of the challenges faced by the coin market. This limits the accessibility of Bitcoin investments to a larger group of audience.

SEC released a rejection order for the first rejection back in March 2017 stating that:

"the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest."
Source: For(ads-loaded)bes - Laura Shin

Image source: pixabay - qimono

A shocking expose within SEC in the second attempt, as we see disapproval split SEC with a 3-1 divided vote. This has led to Heroine and Commissioner Hester M. Pierce to release a public dissent to SEC's decision.

"I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product (“ETP”). Accordingly, I would set aside the action the staff took by delegated authority in this matter and approve the proposed rule change."

In her dissent, many valid points about the rule change for Bitcoin ETFs were made:

1. Greater participation and institutionalization of the Bitcoin market would have a positive effect on the overall investor protection

2. BZX trading (Winklevoss Bitcoin Trust) is capable of surveillance in trading and deter manipulation in Bitcoin ETPs. Underlying trade, Bitcoin and its blockchain is built on a fraud-resistant technology.

3. Backward movement by the Commission to dampen innovation, withholding a novel financial product in the US market.

"The Commission signals an aversion to innovation that may convince entrepreneurs that they should take their ingenuity to other sectors of our economy, or to foreign markets, where their talents will be welcomed with more enthusiasm."

Brian Kelly, founder and CEO of BKCM, is "skeptical of an ETF being approved this year, [as] answers to the questions the SEC has aren't complete yet." Source: CNBC - Kate Rooney.

Image source: pixabay - Cleverpix

While Bitcoin slid below $8000, Commissioner Pierce's dissent has definitely garnered support as the prices quickly rallied above $8000 again after speaking on Bloomberg Radio. Source: Bloomberg - Olivia Schaber and Rachel Evans.

While exposing the split within SEC, the attempt also shows how SEC is now operated by a technologically backward team who refuses to push innovative agenda forward. As Commissioner Pierce has noted, this has given foreign markets a chance overtake the US market, where blockchain technology and new talents are welcomed. South Korea is currently one the places that is poised for a brighter future from this moment onward. So much for making America great again.

-tysler