It appears the US Securities and Exchanges Commission (SEC) needs more time to examine the Winklevoss brothers’ Bitcoin exchange-traded fund (ETF). A filing released today announced further proceedings to approve or disapprove a necessary rule change on the Bats BZX Exchange.
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Commodity Rule Change Required
The exchange’s Rule 14.11(e)(4), regarding commodity-based trust shares, needs to be amended before a cryptocurrency-based ETF may list.
The Winklevoss’ ETF, which they first announced three years ago, has faced repeated regulatory hurdles. They initially spent two years trying to list it on the Nasdaq, before turning to Bats in mid-2016.
After the initial application in June, the SEC set a 45-day period for comments. It received six — most infamously one from Bitcoin critic Jorge Stolfi in July. The Brazilian computer science academic referred to Bitcoin using terms like “ponzi” and “penny stock”.
That initial period expired in August, which the SEC apparently expanded to this week. If there are further submissions, or the regulator cannot decide whether to approve the rule change or not, the application will likely be delayed into next year.
Just Another Step in a Long SEC Process
Thus today’s update is probably neither an unexpected delay, nor a sign approval will come soon. It’s part of the lengthy red tape procedure such new concepts face when entering the legacy financial and equities exchange system.
The Winklevosses are seeking large and institutional investors for their ETF, and these investors cannot touch funds without the legitimacy of a fully-regulated exchange. Approval would go some way toward mainstreaming Bitcoin, and many expect a price leap if/when it happens.
Given the number of hacks, scams and other rough exits at unregulated Bitcoin trading platforms over the past few years, and resulting fallout, the SEC’s cautious approach is not surprising.
Today’s filing suggests the regulator simply wants to hear more opinions before moving forward.
Will the Winklevoss Bitcoin ETF ever happen? Will you invest in it, if/when it does? Let us know.
Images via: Bats
