The United States Securities and Exchange Commission rejected another Bitcoin Exchange Traded Fund suggestion. SolidX, which was taken into consideration as the rival Exchange Traded Fund suggestion to the Bitcoin Exchange Traded Fund created by Winklevoss twins, was denied for the lack of investor safety and overseas Bitcoin buying and selling regulation.
The United States Securities and Exchange Commission denied the approval of the SolidX Exchange Traded Fund for the same motives to that of the COIN Exchange Traded Fund created by famous Winklevoss brothers. In its However, the United States Securities and Exchange Commission noted that SolidX lacks surveillance sharing agreements and investor security for the customers of the Exchange Traded Fund.
Bitcoin as a decentralized monetary network and peer-to-peer protocol cannot be regulated. The authorities can regulate organizations released on top of the Bitcoin network but the network itself is not possible to manipulate or control. Unlike centralized financial networks, it is actually not possible for an Exchange Traded Fund company to comply with surveillance sharing agreements. It is tougher to trace down the origin and the float of Bitcoin transactions in assessment to other monetary equipment or property involved with current Exchange Traded Funds within the marketplace.
The United States Securities and Exchange Commission wrote:
“The United States Securities and Exchange Commission didn’t find the concept to be steady with section 6(b)(5) of the exchange Act, which calls for, amongst different things, that the regulations of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to defend traders and the public interest. The commission believes that, in order to meet this standard, an exchange that lists and trades stocks of commodity-trust exchange- traded merchandise have to, further to other relevant necessities, satisfy necessities that are dispositive in this matter. First, the exchange should have surveillance sharing agreements with huge markets for buying and selling the underlying commodity or derivatives on that commodity. And second, those markets ought to be regulated.”
Therefore, it could be concluded that Bitcoin Exchange Traded Funds will not be accepted nor introduced to united states public markets whenever. The United States Securities and Exchange Commission stated the lack of regulation in overseas trading as one of the main motives for the denial of SolidX. That may be a factor, which Exchange Traded Fund companies cannot enhance upon, if that may be an actual issue for the United States Securities and Exchange Commission, and then until the worldwide Bitcoin marketplace becomes as strictly regulated as the United States marketplace, Exchange Traded Funds will not be introduced within the United States.
Nevertheless, Bitcoin price is displaying resilience towards the United States Securities and Exchange Commission ruling. When the Winklevoss’ Bitcoin Exchange Traded Fund was denied, Bitcoin price fell from around $1,200 to $960. The community has found out that Bitcoin Exchange Traded Funds are not essential for mainstream adoption and for Bitcoin to develop as a cryptocurrency, virtual gold and a settlement system.