SEC turns down yet another crypto ETF attempt
Bitwise is the latest to have its ETF request rejected by the financial regulator
No one should be shocked by this news. The Securities and Exchange Commission (SEC) has, once again, denied another cryptocurrency exchange-traded fund (ETF), the latest in a continued list of rejections that refuses to recognize the viability of crypto trading products. The ETF had been requested by Bitwise Asset Management, in conjunction with the NYSE Arca exchange, but the SEC gave its same standard explanation when it denied the application.
The SEC stated in its ruling that it was denying the request because “NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices.’”
Given the fact that NYSE Arca is a fully functional exchange, the fact that the SEC would assert that it cannot “prevent fraudulent and manipulative acts…” should call into question how it would be able to offer other financial solutions. However, this isn’t really relevant. The truth of the matter is that the SEC simply will not allow a crypto-related ETF since it works in tandem with the Federal Reserve and its control over the national economy.
Bitwise was certainly stunned by the decision. The company’s managing director and global head of research, Matt Hougan, told CNBC a few days ago, “We’re closer than we’ve ever been before to getting a Bitcoin ETF approved,” adding, “Two years ago, there were no regulated, insured custodians in the Bitcoin market. Today, … there are big names like Fidelity and CoinBase [with] hundreds of millions of dollars of insurance from firms like Lloyd’s of London.”
It looks like he was overly optimistic. It’s now back to the drawing board and Bitwise has already said that it might try again in the future once it feels the time is right. As long as Chairman Jay Clayton leads the commission, that time won’t be soon – he doesn’t leave until sometime in 2021.