The United States Securities and Exchange Commission (SEC) is revisiting the decision to reject the Bitwise and NYSE Arca’s application
In an announcement, the SEC stated it will once again examine the companies’ Bitcoin ETF proposal. In October, the Commission rejected the proposal, claiming it didn’t meet certain fundamental requirements.
Specifically, because it didn’t fulfill the requirements of the Exchange Act Section6(b)(5) and the Commission’s Rules of Practice. Thus, the proposal, according to the SEC, cannot “prevent fraudulent and manipulative acts and practices.”
The reason for the review however still remains uncertain. Simultaneously, current Federal Law grants the commissioner the right to reconsider the decision if there’s a petition.
However, Bitwise Global head, Matt Hougan, pointed out that the company didn’t request for the review. At the same time, he added that Bitwise welcomes “the opportunity to submit comments and continue the dialogue with the SEC.”
Importantly, the Commission can do it at its own discretion. According to the report, the SEC’s five commissioners will review the bitcoin ETF.
Possibly, Commissioner Hester Peirce popularly known as “Crypto Mom” is somehow involved. After all, she’s a huge supporter of the crypto space. For instance, in 2018, she announced the review of nine different dismissed Bitcoin ETF applications. She also opposed the second rejection of the Winklevoss twins’ ETF proposal.
For now, the rejection order still stands. At the same time, the general public can send in their comments about the ETF review until December 18, 2019.
This review, however, does not come with a deadline. This is unlike previous SEC formal approval or rejection process.
Market manipulation a major concern
The SEC has revealed that market manipulation is one of the greatest restraints when it comes to approving a Bitcoin ETF. It fears that market manipulation will follow suit.
CEO of Findora, Charles Lu, recently said that the likelihood of having a crypto ETF approval anytime soon is quite slim. He believes, “For a bitcoin ETF proposal to gain SEC approval, the sponsor will need to prove that real price discovery is happening as opposed to market manipulation.”
He added, “The SEC will require surveillance-sharing agreements with significant cryptocurrency exchanges — a requirement that few foreign-domiciled exchanges will agree to.”
Reversing the rejection would definitely launch the entire crypto space into a whole new era.
Recently, Former Nasdaq CEO recently called the Commission slow. And added that working with them was a frustrating and tedious experience.