The SEC To Review The Bitwise Bitcoin ETF Proposal Again

The SEC To Review Bitwise’s Bitcoin ETF Proposal Again

The U.S. Securities and Exchange Commission (SEC) has taken the decision to review a Bitcoin exchange-traded fund (ETF) proposal. The commissioners will review Bitwise’s case, which was rejected on October 9, 2019.

On October 15, 2019, the Secretary of the Commission notified NYSE Arca that, pursuant to Commission Rule of Practice 431, the Commission would review the Division’s action pursuant, which disapproved the proposed rule change, to delegated authority and that the Division’s action pursuant to delegated authority had been automatically stayed, stated the SEC on a press release.

It is unclear why the SEC has taken this action. A Bitwise representative told Coindesk that Bitwise did not request the review, though they “welcome the opportunity to submit comments and continue the dialogue with the SEC.

That the SEC is willing to review this case is important for crypto funds and exchanges operating in the U.S., as it shows how the U.S. regulator is willing to further discuss and furthermore find regulation formulas that can be adapted to cryptoassets.

Talking about the decision of the SEC, Simon Peters, analyst and cryptoasset specialist at multiasset trading platform, eToro, said that: “Bitwise didn’t request the review, so it’s an interesting move by the SEC. Perhaps regulators in the US realise that if they don’t approve a cryptoasset ETF, then another jurisdiction might beat them to it and get an advantage in the marketplace.”

In fact, other countries are stepping up in regulating ETFs. Switzerland, for example, is positioning itself as crypto friendly, one of the reasons the Libra Association is based in Geneva. And of course China under President Xi Jingping is embracing cryptoassets and blockchain, so the Americans won’t want to be beaten to the punch by Beijing. Other countries specially welcomed to crypto exchanges are Malta or Singapore.

“Whether Bitwise’s proposal gets approval this time around really depends on how the SEC now feels about price manipulation in the crypto markets, which was the reason the ETF plan was rejected last time,” continued Simon Peters. “A proposal for a Bitcoin ETF by Wilshire Phoenix is also in front of the SEC. If the regulator suggests Bitwise uses a similar CME Bitcoin Reference Rate for pricing to address the risk of price manipulation, we could see significant progress towards a Bitcoin ETF. This would be a major step in the widespread adoption of cryptoassets.”

The order rejecting the proposal will remain in effect until the review has concluded, the notice said, with the commissioners either upholding the staff rejection or overturning it. As part of the review, the general public can comment on the rejection through Dec. 18, 2019.