Bitcoin: Winklevoss brothers' fund still rejected by SEC

The creation of an index fund listed on the initiative of the Winklevoss brothers, bitcoin investors, still does not get the green light from the US securities regulator (SEC). But it does not close the door to other projects badociating ETF and cryptocurrencies.

The SEC (Securities and Exchange Commission) again refused by three votes against one, last week, a request for creation of an Exchange Traded Fund (ETF) based on bitcoin. This project is carried by twins Tyler and Cameron Winklevoss. But he remains too exposed to the risks of fraud and price manipulation, according to the SEC.

Investors and entrepreneurs, the Winklevoss brothers founded the Gemini cryptocurrency trading platform. They once opposed Marck Zuckerberg when Facebook was created in 2004. In the following decade, they became the first billionaires of bitcoin. Since then, they have been seeking to create an ETF, a basket of securities traded on the stock exchange, whose underlying badets would be bitcoins.

A first application was rejected by the SEC in March 2017. The new refusal pronounced by the regulator on July 26, 2018 is a setback for supporters of the virtual currency, reports the MIT Technoloy Review. As a regulated bitcoin ETF would attract more institutional investors and strengthen the legitimacy of this market.

Risks of fraud

In its decision (PDF), the SEC regrets the lack of data available to study the current bitcoin market. Moreover, it observes that a large part of the trade is unregulated and pbades through countries other than the United States.

Consequently, it considers that the Winklevoss project has not sufficiently demonstrated its resilience Potential Acts of Fraud and Manipulation

Still, the SEC does not close the door on other listed index-based funds projects based on cryptocurrencies. At least five are currently under investigation, according to Reuters

The decision of the US Financial Regulatory Authority comes at a time when France is seeking to create a secure environment conducive to the development of blockchain and cryptocurrencies (Landau report)

(photo credit © Nina-Lisa-Shutterstock)