SEC Rejects Bitwise Bitcoin ETF Proposal

The U.S. Securities and Exchange Commission (SEC) rejects the Bitwise Bitcoin ETF proposal. The SEC announced on Oct, 9th that the Bitwise Bitcoin ETF proposal has not met the requirement under the Exchange Act and the Commission’s Rules of Practice to prevent fraudulent and manipulative acts and practices.

SEC to date has rejected all Bitcoin ETF proposals citing fraudulent and market manipulation practices as the primary concern. Earlier this year Bitwise published research that 95% of the bitcoin spot market consists of fake and non-economic activity. Therefore in their proposal, the firm suggests using the price and volume from selected Bitcoin spot market exchanges.

Bitwise published recently a new research report showing that since their previous study report on fake Bitcoin trading volume, the market has matured and believes that identifying accurate net asset value could be discovered from their proposal.

However, as per SEC commission, the Bitwise Bitcoin ETF proposal has not established that it has, in fact, identified the “real” bitcoin market, or that the “real” bitcoin market is isolated from the fraudulent and manipulative activity. Therefore the Commission disapproves of the proposal.

Bitwise first filed the proposal in Jan 2019. With this rejection and VanEck already withdrawn its application, SEC now has only one Bitcoin ETF proposal pending for decision, filed by Wilshire Phoenix and NYSE Arca.