SEC Denies Winklevoss Twins' Bitcoin ETF Proposal Again
Gemini founders Cameron and Tyler Winklevoss aimed to introduce a regulated cryptocurrency ETF but faced SEC rejection.
The U.S. Securities and Exchange Commission (SEC) remains unconvinced that a bitcoin exchange-traded fund (ETF) serves as a prudent investment option. Recent coverage by CNBC revealed that the SEC has rejected the Winklevoss twins’ second attempt to launch a bitcoin ETF on a regulated exchange. Known for their early involvement in Facebook's creation, Cameron and Tyler Winklevoss later founded Gemini, a standout and innovative digital currency exchange platform.
June ETF Proposal Denied
In June, the Winklevoss brothers submitted a fresh proposal for the Winklevoss Bitcoin Trust through the BATS BZX Exchange, seeking to list and trade bitcoin ETF shares. However, the SEC voted 3-1 against this proposal earlier this week, marking their second unsuccessful effort to bring a bitcoin ETF to market. Their initial application was also turned down last year, prompting revisions before the latest submission.
Concerns Over Market Manipulation Persist
The Winklevoss twins argued that bitcoin markets, including Gemini, are "distinctly resistant to manipulation." The SEC, however, disagreed, highlighting ongoing concerns about fraud risks and investor protection as key reasons for the rejection. Importantly, the SEC clarified that their decision does not comment on bitcoin's intrinsic value but focuses on safeguarding investors from potential market abuses.
Despite the setback, Cameron Winklevoss, Gemini’s co-founder and President, expressed optimism: "Although today's ruling is disappointing, we remain committed to collaborating with the SEC and are dedicated to launching a regulated bitcoin ETF and shaping the future of finance."
To date, the SEC has not approved any digital currency-based ETFs. The commission noted that over 75% of bitcoin trading volume occurs outside the United States, with only about 5% happening on U.S. exchanges. Following the announcement, bitcoin’s price experienced a roughly 3% decline.
Investing in cryptocurrencies and Initial Coin Offerings (ICOs) involves significant risk and speculation. This article does not constitute investment advice from Investopedia or the author. Individual financial situations vary, and consulting a qualified professional is recommended before making investment decisions. As of this writing, the author holds bitcoin and ripple.
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