By
Steve Muchoki
April 16th, 2024
After long months of waiting for the decision from the SEC, Bitwise has withdrawn its Bitcoin ETF proposal.
Bitwise Bitcoin ETF proposal has been withdrawn. The cryptocurrency asset management firm indicated that it had submitted a note to the U.S. SEC. Bitwise said that the withdrawal request is “consistent with the public interest and protection of investors”. This shows that the firm is studying the situation at this time. The global head of research told:
“We did indeed withdraw the application. This is a procedural step, and we intend to refile our application at an appropriate time.”
It also shows the SEC’s reluctance to allow cryptocurrency firms to make real progress. The U.S. SEC seems to keep raising the bar. It is also stifling the development of cryptocurrency projects through these measures.
Hougan said that the firm was answering questions that the SEC had raised. The SEC raised those questions in a 112-page response to the initial filing. A new filing date remains unclear for now. Bitwise had recently stated its commitment to improving people’s access to Bitcoin. It had filed the ETF proposal in January 2019. The firm had also met with the SEC eight times. It submitted a 500-page whitepaper and made a presentation on fake volumes at the time.
The only Bitcoin ETF proposal before the SEC is the jay proposal. The SEC is expected to rule on it by February 26.
The pathway to cryptocurrency ETFs is murky at best. SEC Chairman Jay Clayton indicated that there may be no ETF proposals until manipulation concerns are addressed.
The SEC has already given its blueprint. The CFTC, on the other hand, has done its best to consider cryptocurrencies such as Bitcoin and Ethereum as commodities. This also indicates that the SEC is toeing the line of U.S. lawmakers in congress. The current Keep-big-tech-out-of-finance act is one example.
The bill came up last year during the congressional hearings on Facebook’s Libra. American politicians don’t want to rock the boat. The U.S. SEC is following that example. It has wider-reaching powers than any other financial regulatory agency in the U.S.
Bitwise Bitcoin ETF Proposal Is Part of Many Crypto Space Roadblocks
This fact has led to many roadblocks for cryptocurrency-related projects. The regulator at the SEC needs to cover a lot of ground. That way, approval will not lead to problems later. Several key players in cryptocurrency markets have been accused of manipulation of markets. Bitfinex, the issuer of Tether, is one such example.
Cryptocurrency markets are largely unregulated. This led to the cryptocurrency bubble in 2017. Regulators don’t want a repeat of this. This is one reason for stricter rules that are in place. Unregulated markets lead to “pumping and dumping”. Classic market manipulation actions are what the SEC wants to avoid at all costs. It appears for now though that the chances of an ETF approval are slim at best.