On Friday, the U.S Securities and Exchange Commission (SEC) dealt a massive blow to crypto-currency enthusiasts by rejecting the proposal for Winklevoss twins Bitcoin Trust ETF. This is a major defeat for the Winklevoss twins who have insistently been trying to gain exemptions that would let their trust fund to publicly trade on the stock exchange.
The SEC have issued an order declining their proposal, which would’ve allowed individuals to trade in Bitcoins without setting up any wallets. They’ve stated that the unregulated nature of the Bitcoin market posed an immediate threat to its trading. It further adds that the said nature makes the digital currency made it too difficult to monitor, thus, making it highly susceptible to fraudulent activity.
Speaking on the same in an official statement, the Securities and Exchange Commission said,
Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.
The Winklevoss twins, who’re renowned for their lawsuit against Facebook, have been working for years to tweak their proposals to set up the proposed Exchange Traded Fund (ETF). The investment tool, if implemented, would’ve led to the formation of a common stock fund matched with the current market price of the Bitcoin. This would have become the means for an individual or Wall Street investor to pick up a stake in this digital currency, without having to worry about wallets. Though they’d still be required to have one to spend Bitcoins against their transactions.
This decision came as a major setback for the Winklevoss twins as well as the currency, causing it to tumble down by as much as 18 percent in intra-day trading, reports Bloomberg. The lowest price for one Bitcoin against the dollar was quoted to be around $978, which is massively lower than the all-time highs it had recently achieved. The impending decision had caused the Bitcoin to become more valuable than one ounce of Gold, a couple days ago.
The Winkelvoss twins have released a statement (via Forbes) saying that they’re still committed to working with the SEC to further tweak their proposal and bring their Bitcoin ETF to the market. Tyler Winklevoss continued to add,
We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors.
While today’s proposal rejection definitely comes as a massive blow against the upliftment of digital currency, but it isn’t our last shot. The SEC is still to rule on two other ETF proposal sitting with them, so we still have our hopes up. Since the regulatory body does not have any issues with the ETF but the regulation surrounding the Bitcoin market itself, so we cannot be too sure about the acceptance of these proposals as well.