After Bitcoin’s recent rebound helped it get back up to $8200, Bitcoins price has dropped below $8000 due to a rejection of a Bitcoin ETF proposal.
The announcement came after the U.S Securities and Exchange Comission (SEC) reviewed the proposal for a second time after an appeal by the famous crypto investors, Cameron and Tyler Winklevoss. The initial application was rejected on March 10, 2017.
Reasoning of Decision
The reasoning of the SEC comes from whether the exchange could “prevent fraudulent and manipulative practices” as well as “protect investors and the public interest”. Last May, the regulators conducted an investigation to find whether the price of Bitcoin is manipulated.
The SEC came to the decision that bitcoin did not provide the safety against manipulation as an asset class and that the technology did not provide adequate tools for preventing fraud and money laundering. The complexities of blockchain technology required a rule modification to the Securities Exchange Act. The burden of evidence for a rule change fell on the applicants.
The SEC however gave a hopeful tone towards the future of Bitcoin stating Bitcoin market regulations are still in early phases and they are watching bitcoin derivative markets to keep tabs on their popularity.