Another attempt to list a Bitcoin exchange-traded fund (ETF) failed as the Securities and Exchange Commission (SEC) rejected a proposal filed by Bitwise.

Announced by the regulator on Wednesday, the proposal failed to meet the legal requirements to prevent market manipulation or other illicit activities.

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The proposal was filed by Bitwise Asset Management in conjunction with NYSE Arca first in January 2019. The US agency put the burden of rejection on NYSE Arca, rather than finding a lapse on Bitwise’s part for the proposal.

“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices,” the SEC stated in the order.

Last month, Bitwise updated its proposal with the SEC to include BNY Mellon as the administrator, transfer agent, and custodian for its Bitcoin ETF.

“The Commission concludes that claims by the Sponsor and a commenter that the “real” spot bitcoin market is organized, efficient, resilient, or robust, or has tight spreads, do not suffice to distinguish the proposed ETP from other derivative securities products, such as equity options, where the Commission required surveillance-sharing agreements with a significant, regulated market even though effective arbitrage exists among the relevant markets,” the agency added.

No Bitcoin ETF will list on 2019

Bitwise’s competitor in the race to introduce a Bitcoin ETF – CBOE – withdrew its proposal to launch the product last month amid the approaching deadline of the SEC’s decision.

“The Commission also notes that NYSE Arca has not stated that it has entered or will enter into surveillance-sharing agreements with those “real” spot platforms that utilize surveillance tools,” the agency noted.

“Moreover, even if NYSE Arca did enter into such agreements, it is not clear what ability NYSE Arca would have to compel the sharing of surveillance data.”