The US Securities and Exchange Commission (SEC) has rejected a proposal by ProShares, Direxion and GraniteShares to create Bitcoin trading investment funds (ETFs). The commission provided the same reasons for refusal to all three companies.
The agency explained the rejection of ProShares' proposal as follows:
“... The Commission rejects the proposal to amend the rules because the company could not demonstrate that its proposal complies with the requirements of Sections 6(b)(5) of the Exchange Act and, in particular, the requirement that exchange rules focus on protection against fraudulent and manipulative practices..
In the case of ETFs offered Direxion, the refusal was provided with exactly the same wording.
The commission used a similar explanation for GraniteShares' refusal.
In all cases, the SEC emphasized that “their refusal had nothing to do with an assessment of whether Bitcoin and blockchain technology are useful innovations or valuable investments.”
The SEC rejected the proposals of the three companies shortly after finishing its review of the ETF proposed by investors Cameron and Tyler Winklevoss - the majority of the commission members voted against the initiative.
The language used by the commission for the refusals of the three companies is very similar to the rationale two refusals to the Winklevoss brothers to establish a Bitcoin ETF. However, the proposals of these three companies were unique in that they offered futures trading rather than the creation of a fund that directly stores Bitcoin.
Notably, the SEC quoted a letter from the head of one of the CBOE futures market participants:
“In addition, the President and COO of CFE recently stated in his letter to the commission that “current trading volumes in futures on the Cboe Futures Exchange and CMEs may not be sufficient to fully support Bitcoin ETP.”
“The Commission recognizes that, compared to trading in unregulated Bitcoin markets, trading Bitcoin-based exchange-traded products on national securities exchanges may help better protect investors. At the same time, the commission must consider these proposals in the context of compliance with the law,” agency representatives said in their refusal to ProShares.
According to coindesk.com
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