The United States Securities and Exchange Commission (SEC) is reviewing its decision to reject the application for a Bitcoin exchange-traded fund (ETF) that was submitted by Bitwise Asset Management and NYSE Arca earlier this year. The announcement came in an official notice dated November 18th, 2019.
Bitwise’s head of research, Matt Hougan, said to CoinDesk that the company was not seeking to overturn the SEC’s decision, though it “welcome[s] the opportunity to submit comments and continue the dialogue with the SEC.”
Bitwise’s application was originally denied on October 9th of this year. While it’s not entirely clear what caused the SEC to bring the application back to review, SEC commissioners have the ability to review decisions following the filing of a petition, or at their own discretion.
CoinDesk reported that unlike the formal process of approval and disapproval on an ETF application, there are no fixed deadlines for the review of a decision. Previously, the SEC reviewed the rejection of the Bitcoin ETF application submitted by Cameron and Tyler Winklevoss, founders of the Gemini exchange; after more than a year passed, the rejection was ultimately upheld.
Bitwise called the rejection “a productive step in the journey toward a regulated crypto ETP”
At the time that Bitwise’ ETF was rejected, the company tweeted that “though ‘disapprove’ doesn’t seem positive, this is a productive step in the journey toward a regulated crypto ETP.”
The company also said at the time that “in short, the issue is a known one: concerns about market manipulation & oversight. We’re optimistic about this & how the market has matured on this front in just the past 2 [years]. But there’s more to be done,” and that “Historically, the journey to approval for first-of-a-kind ETPs —bonds, gold, non-transparent, leverage— has taken multiple [years].”
4/ B. Why is this positive?
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The SEC’s responsibility is to protect investors. The journey to a public, regulated ETP requires that they diligence all possible concerns.
This is what progress looks like.
The order adds detail & clarity to the issues that need to be overcome.
— Bitwise (@BitwiseInvest) October 10, 2019
The review of the Bitwise application could result in a similar outcome. Indeed, a number of experts have speculated that years may pass before the SEC would consider approving an ETF application.
In September, SEC Chairman Jay Clayton said to CNBC that “we have to get to a place, in my view — just speaking for myself — we have to get to a place that we can be confident that trading is better regulated” before a Bitcoin ETF would be allowed.