On July 26, 2018, the US Securities and Exchange Commission published a 92-page document, which explains why the agency disapproved a proposed rule change seeking to list and trade shares of the Winklevoss Bitcoin Trust.

Bitcoin-linked exchange-traded funds (ETFs) were hit with another setback on Thursday, as the US Securities and Exchange Commission (SEC) announced that it once again disapproved of a proposed rule change that could have allowed the listing and trading of shares in the Winklevoss Bitcoin Trust. The agency previously denied the bid in March 2017.

CBOE Holdings Inc’s Bats exchange, which sought the approval, may choose to appeal the SEC’s decision in federal court, according to ReutersOver the last several months, bitcoin ETFs have served as a rallying point for many cryptocurrency enthusiasts, as they seek to legitimize the digital currency and open up the asset class to new investors (both on Main Street and Wall Street).

Today, one SEC commissioner, Hester Peirce, dissented from the majority, arguing that the “proposed rule change satisfies the statutory standard” and worrying that the SEC’s stance “undermines investor protection by precluding greater institutionalization of the bitcoin market.”

 

Commissioner Peirce also expressed concern that with the disapproval order the SEC “signals an aversion to innovation that may convince entrepreneurs that they should take their ingenuity to other sectors of our economy, or to foreign markets, where their talents will be welcomed with more enthusiasm.”

Earlier this week, the SEC postponed a decision on NYSE Arca’s proposed rule change to list Direxion’s bitcoin-tied ETFs.