The Securities and Exchange Commission rejected a proposal by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, for the first-ever cryptocurrency ETF.
Last year, the SEC rejected an application for the “Winklevoss Bitcoin Trust” but in June, the group submitted a proposed rule change with the commission.
The agency said in the release that it did not support the Winklevoss’s argument that Bitcoin markets, including the Gemini Exchange, are “uniquely resistant to manipulation.” It also highlighted issues of fraud and price manipulation.
The U.S. financial watchdog has yet to approve a cryptocurrency-based ETF. It published a letter in January highlighting “significant investor protection issues that need to be examined” before sponsors can offer these funds to retail investors.
Bitcoin soared two a two-month high above $8,300 this week, partially because of rumors that the SEC could approve an ETF as early as August. While they need to address one proposal by August 16, based on the agency’s denial of other ETFs, it could be multiple months before a meaningful announcement.
VanEck and SolidX have also filed a joint application for a Bitcoin ETF, which was published for comment on July 2. According to Dodd Frank rules, the agency needs to take action within 45 days of the publication of that proposal, which falls on August 16.
This is a developing story. Check back for updates.