SEC spokesman criticized the refusal for Winklevoss brothers to launch Bitcoin-ETF

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SEC authorized representative, Hester Peirce, disagreed with the agency and criticized the refusal for the Winklevoss brothers to launch Bitcoin-ETF.

In an official statement, Hester Peirce of the SEC said that the Commission was considering whether the proposal from the Winklevoss brothers was consistent with the provisions of the Securities Exchange Act of 1934.

In particular, the Commission did not approve the proposed change in the rules, since the BATS Global Exchange (BZX), where the fund is planned to start, could not confirm that its offer was consistent with section 6 (b) (5) of the Exchange Act. It states that the rules should be drawn up in such a way as to discourage acts of fraud and manipulation.

The SEC authorized representative pointed out that according to the application of the Winklevoss brothers, Winklevoss Bitcoin Trust will impose obligations and register market makers in order to prevent fraud and manipulation. BZX also said that it will stop the activity of bitcoin-ETF if this becomes a threat to market stability.

“All this convinces me that the proposal of BATS Global Exchange corresponds to section 6 (b) (5). Contrary to the decision of the Commission, I believe that the proposed change in the rules corresponds to the normative standard, so we must give permission to BZX to launch bitcoin-ETF, ” said Peirce.

According to Hester Peirce, another reason why the SEC refused to launch Bitcoin-ETF is the bitcoin market problem, like the difference in prices on various exchanges. In her opinion, the creation of a stock exchange-based investment fund tied to Bitcoin will facilitate arbitrage transactions and equalize prices at various sites.

Hester Peirce also pointed out that the SEC’s decision prevents investors from “getting access to bitcoin through a stock exchange offering predictability and transparency.”

“Investors who want to diversify their portfolios by adding bitcoin will go to the spot market. This will weaken the institutional discipline that the approval of this product will bring, “the statement said.

According to Hester Peirce, the SEC approach also signals that the regulator does not welcome innovative solutions in the US markets. She stated that in the future the opposition view of the Commission could have consequences that are beyond the scope of the issue under consideration.

The SEC decision was also commented on by bitcoin developer Jameson Lopp. According to him, this is not bitcoin in need of institutional investors, the inflow of which can ensure the launch of ETF, but on the contrary, institutional investors need bitcoin.