It would seem that the cryptocurrency industry is in a semi-permanent state of seeking regulatory approval and acceptance around the globe and this can be seen with the new laws that are being drafted on a consistent basis to accommodate the industry and it is believed that should blockchain and crypto be embedded into the various regulatory systems, more acceptance will be guaranteed. However, one of the most elusive developments within cryptocurrency and regulation is the bitcoin exchange-traded fund which has been applied for by many firms for years and all of them have either been denied or withdrew the applications altogether.
One of the latest in this regard was an application by Bitwise Asset Management and NYSE Arca which has been rejected according to an October 9, 2018 announcement by the United States securities and exchange commission and according to them, the reason the exchange traded fund application was denied was because they did not meet the necessary requirements.
Another One Bites the Dust
The announcement states that the company did not need the necessary requirements specifically regarding illicit activities and market manipulation. It is rather interesting considering a 2018 report stated that huge chunk of crypto exchange volume is faked and manipulated.
“Rather, the Commission is disapproving this proposed rule change because, as discussed below, NYSE Arcahas 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 Exchange Act Section6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices,” the announcement said.
Just two days ago on October 7, 2019, Matt Hougan, managing director and global head of research at Bitwise had stated that he was optimistic that they would get approved for the bitcoin ETF by pointing to the growth that has taken place in the last two years and believed that they were on a good footing.
“Two years ago, there were no regulated, insured custodians in the Bitcoin market. Today, … there are big names like Fidelity and CoinBase [with] hundreds of millions of dollars of insurance from firms like Lloyd’s of London,” he said.