Rejected Bitcoin ETF Applications: SEC Withdraws Decision, Calls for Review

The US SEC (Securities and Exchange Commission) after its rejection of nine (9) Bitcoin ETF applications from three (3)applicants on August 22 2018 has in a surprise move called for a review of  this decision.

The Bitcoin ETF applications initially filed by ProShares, Direxion and GraniteShares had  yesterday been rejected in three (3) separate statements issued by the SEC, sighting inadequacy of these exchanges ‘resistance to price manipulation (fraud)’ and inability of exchanges to prove Bitcoin futures markets as ‘markets of significant size’ as major reasons for rejection.

In a plot twist as seen by three separate letters dispatched by the SEC through its Secretary – Brent Fields and addressed to the NYSE Group, the SEC wrote;

This letter is to notify you that pursuant to Rule 431 of the Commission’s Rules of Practice, the Commission will review the delegated action. In accordance with Rule 431 (e), the August 22 order is stayed until the Commission orders otherwise. The Office of the Secretary will notify you of any pertinent action taken by the Commission.

However, the letters failed to state clearly any expected date for the completion of the review. The SEC Commissioner Hester Pierce in her tweet attributed the call for review as necessary procedure taking into consideration that yesterday’s disapproval was made by delegated staff orders (where the staff acts on behalf of the Commission/Commission’s leadership) hence, the Commission may review the staff order as in this case.

SEC Commissioner’s tweet

Commissioner Pierce who had previously expressed a different view as regards the denial of the Winklevoss Twins Bitcoin ETF application in which she was quoted as saying;

If We were to approve the ETF, investors could choose whether to buy it or avoid it. The Commission’s action today deprives investors of this choice and I reject this participating role of gatekeeper of innovation which goes against our mission of protecting and facilitating fair, orderly and efficient markets.

She further explained that the recent call for review will be done by SEC Chairman Jay Clayton and associate commissioners to determine whether or not SEC staff ruled fairly.

In all even as Bitcoin price and the crypto market have surprisingly held strong despite the SEC’s initial rejections, it is believed that the ETFs approval would spell a good spike for Bitcoin price.

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