According to the official document released by the SEC, the Bats BZX Exchange, Inc.
This is certainly a good sign that one of the SEC commissioners is in favor of Bitcoin ETF which has the crypto community excited and hopeful. Cameron and Tyler Winklevoss' bid was rejected, but there's another active application for a Bitcoin ETF, coming from the VanEcx SolidX Bitcoin Trust.
In the hours after the decision, the price of Bitcoin fell to just under $8,000, representing around a 3% fall.
A review of the 92-page decision suggests the agency was skeptical of the specific arrangement proposed by the Winkelvoss twins, and not because of an underlying hostility to Bitcoin in general.
"Contrary to the Commission's determination, I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product ("ETP")", Peirce wrote. If it has been approved, this would have become the first ever cryptocurrency ETF.
The exchange further claims that "novel systems intrinsic to this new market provide unique additional protections that are unavailable in traditional commodity markets" and that its original proposal contained "traditional means of identifying and deterring fraud and manipulation".
"Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets".
Since, it is expected that ETF will be a tool that will attract more institutional investors into the Bitcoin market.
This rejection was met with dissent from SEC Commissioner Hester Maria Peirce, who previously served as a lawyer specializing in financial market regulation.
"More institutional participation would ameliorate numerous Commission's concerns with the bitcoin market that underlie its disapproval order", she wrote, adding that the decision "sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin ETPs".
Attached with the tweet was her statement of dissent regarding the decision made by the SEC.
A surveillance-sharing agreement may have helped the Winklevosses' odds, but since BZX "has not established that it has entered into, or now could enter into, a surveillance-sharing agreement with a regulated market of significant size related to bitcoin", the exchange cannot support its claims that it has sufficient measures in place to police manipulation.
The Commission emphasizes that its approval does not rest on an evaluation of whether Bitcoin or blockchain more generally has utility or as an innovation or an investment, the agency stated.