After more than three years, The US Securities and Exchange Commission rejected a request to list the virtual currency bitcoin on the market. The decision came as a big disappointment for Cameron and Tyler Winklevoss, the exchange-traded fund investors who placed the bid banck in 2013.
In short, the SEC said the bitcoin is still unregulated and has a high risk of fraud.
Bitcoin is a (not so) new digital currency found on the Internet, through which investors are able to move money around the world quickly and with relative anonymity. The so-called cryptocurrency is powered by its users, with no central authority or middlemen.
Yet bitcoin presents a new set of risks to investors given its limited adoption, a number of massive cybersecurity breaches affecting bitcoin owners and the lack of involvement from the governments.
The Commission said that, in order to meet its high standards, an exchange that lists and trades shares of commodity-trust exchange-traded products (ETPs) must, in addition to other applicable requirements, satisfy two important requirements.
“First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated,” said the Commission in a press release.
But the decision is not final. The SEC might change the verdict at a later date, when and if the bitcoin market will be regulated. “The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.”
Following SEC’s decision, bitcoin fell 18 percent in trading immediately after, but has since stabilised and even recovered, and it is priced at the time of this article at roughly 1.100 US dollars.
The Winklevoss twins – who are famous for their conflict with Facebook mogul Mark Zuckerberg over who came up with the idea for the groundbreaking social media site – have stated that they understand SEC’s decision, but will not give up their efforts. “We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors,” said Tyler Winklevoss, CFO of Digital Asset Services.