It is official. The Securities Exchange Commission (SEC) denied the Winklevoss twins’ Bitcoin ETF COIN on March 10.
Almost immediately after the public statement from the SEC was released to the public, Bitcoin price plunged, from $1,350 to $980 within seconds.
Bitcoin price recovered relatively quickly thereafter, maintaining stability at the $1,100 margin.
In its official statement, the SEC
wrote:
“As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest. The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter.”
Why was the COIN ETF denied?
One of the major parts of the public announcement of the SEC focused on surveillance sharing agreements. For the SEC
to approve a Bitcoin ETF, in this case, the Winklevoss twins’ Bitcoin ETF COIN, the commission had to know with full certainty that the exchange traded funds of COIN can be surveilled and tracked without any potential boundaries or obstacles moving forward.
“First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated,” the document read.