Despite the US SEC decision to deny nine ETFs, Bitcoin prices are surprisingly stable.
It appears bad news has been priced into the coin.
We truly expected to see a sizable sell-off, but it never came. That’s because the U.S. SEC is taking a second look at the recent decision. In fact, according to Commissioner, Hester Peirce, senior officials will now review the rejections themselves.
“In English,” she says, “The Commission (Chairman and Commissioners) delegate some tasks to its staff. When the staff acts in such cases, it acts on behalf of the Commission. The Commission may review the staff’s action, as will now happen here.”
While it’s unlikely it’ll lead to approval, it does mean the U.S. SEC is taking proposals seriously.
Nine Bitcoin ETFs were Rejected by the U.S. SEC
It rejected two ETFs by ProShares that would track Bitcoin future contracts. It denied five inversed and leveraged ETFs from Direxion. And it denied one from GraniteShares.
The US SEC cited failure to prevent manipulation and fraud as a reason for denial. It also noted that failure to prove Bitcoin markets are “markets of significant size” as another reason.
This is similar to the reasoning behind denying the Winklevoss ETF, too.
“…the Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’”
In addition, the U.S. SEC has not seen any evidence to prove the size of the Bitcoin futures market.
“Surveillance-sharing with a regulated market of significant size related to is necessary to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices,” they noted.
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