SEC Rejects Three Bitcoin ETFs

Another round of attempts to get bitcoin exchange-traded funds approved by the Securities and Exchange Commission has failed.

Bloomberg, citing the Securities and Exchange Commission, reported the government agency rejected bitcoin ETFs from ProShares, GraniteShares and Direxion, citing concerns that the funds would be easily manipulated. The SEC said the proposals for the funds did not do enough to show how exchanges that want to list the products can prevent fraud and manipulative acts. This comes after the SEC denied in July a request for a bitcoin ETF that would be run by Cameron and Tyler Winklevoss. The SEC said then that the fund didn’t prove it could withstand market manipulation, noted the report. “The commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment,” the SEC wrote, according to Bloomberg. It said it disapproved because “the exchange has not met its burden.”

The move on the part of the SEC to deny or delay requests for bitcoin ETFs has hurt the prices in the marketplace, since many are betting the ETFs will bring legitimacy to the marketplace. After hitting a high of nearly $20,000 late last year, the price of bitcoin has dropped dramatically, recently trading around $6,500.

An earlier blow to the cryptocurrency market came earlier this month when Forbes reported Coinbase CEO Brian Armstrong’s statement that even though cryptocurrencies are seeing a bit more adoption globally, it will not be enough to underpin prices. Said the CEO, according to Forbes: Mass adoption, in use cases where the marquee crypto is used for payments, will be a long way away.  He made his comments to Bloomberg at the Bloomberg Player’s Technology Summit in California.“I think it will be quite some time before you cross the street to Starbucks in the U.S. and pay with crypto,” he said.