The U.S. Securities and Exchange Commission (SEC), in a notice on Nov. 18, has decided to provide Bitwise’s proposal for Bitcoin ETF, which was rejected last month, another chance. The move came as a shock because Bitwise’s Global head of research, Matt Hougan, responded to the news by quoting, “Bitwise did not request the review.” In an email response, he appreciated the SEC’s decision and showed his company’s Willingness to co-operate with the committee. The SEC has not mentioned what triggered the review. Still, under the current federal law, the five commissioners of the SEC have the authority to grant a review, either on their own or in response to a petition.
Previously, the Winklevoss twins had filed a petition to review the order of rejection of a Bitcoin ETF proposal. The SEC did decide to review the appeal then, but after careful consideration, rejected the proposal once again. Therefore, most experts suggest that Commissioner Hester Peirce, known as the “Crypto Mom,” could have done it, because of his inclination towards the crypto industry. He has been a vocal proponent of allowing registration of Bitcoin ETF and did not subside with the rest of the commissioners when they rejected the Winklevoss’s petition for Bitcoin ETF. Similarly, Pierce had also announced to review the ETF proposals filed by GraniteShares, ProShares, and Direxion in late 2017 and early 2018. However, in this current review, no one is sure what caused the SEC to review their decision.
However, the notice clarified that until the review is not final, the SEC will stand by its previous order. The commission will take comments from the general public on the rejection by Dec. 18, 2019. The notice did not mention any deadlines for the review as it had for the approval or disapproval process.
Many experts are still not optimistic regarding any change of stance from the SEC because they believe that the commission wants the industry to mature, as SEC Chairman Jay Clayton had stated in several instances. However, Matt Hougan, Bitwise’s global head of research, is optimistic but patient. He pointed out that the SEC is at least showing its Willingness to consider petition after petition and reviews after reviews rather than blatantly closing doors for the crypto ETF. The SEC took out the time to raise its concerns in the 112-page order is issued when it rejected Bitwise’s Bitcoin ETF proposal, which had over 500 footnotes. It has provided legal experts and developers in the industry on what they could do to get approval.
One of the major concerns of the SEC is that of the potential for manipulation that cryptocurrencies have. Even Bitwise had accepted through its research, that only 5% of the crypto trading is real and the rest is fake. The ongoing talks about regulations and regulatory authorities inclining towards allowing crypto for financial use or making their own digital economies, the approval of an ETF during this time makes a lot of sense.