In breaking news, the United States SEC (Securities and Exchange Commission) has rejected a Bitcoin exchange-traded fund (ETF). This announcement comes as questions mount over whether the SEC is ready to green-light an ETF or not.

SEC rejects Bitwise Bitcoin ETF application

Specifically, this recent Bitcoin ETF proposal came from Bitwise Asset Management and NYSE Arca. In the official announcement from the Securities and Exchange Commission, released on October 9th, the Commission specifies its reasoning.

Moreover, the SEC’s reply to the Bitwise Bitcoin ETF application states that Bitwise Asset Management and NYSE Arca did not meet the necessary requirements for ETF listing.

Although this might appear vague, the reply states that it was questions over how the potential ETF would handle possible illicit activities and market manipulation that led to their rejection of the Bitwise ETF application. Furthermore, the reply also goes into some detail regarding this:

“Rather, the Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices.”

Bitcoin ETF closer than ever?

Although the news that the Bitwise Bitcoin ETF has seen rejection from the SEC, this has not put out the hopes for an ETF. Rather, some commentators speculate that a Bitcoin ETF might actually be “closer than ever”.

Furthermore, a recent CNBC interview with Bitwise’s managing director and global head of research, Matt Hougan, echoes this sentiment. “We’re closer than we’ve ever been before to getting a Bitcoin ETF approved,” Hougan commented.

Nevertheless, one should note that Hougan has long been bullish regarding the potential of a Bitcoin ETF. Moreover, this latest CNBC interview saw him reference how the crypto space has been growing explosively over the last few years.

“Two years ago, there were no regulated, insured custodians in the Bitcoin market. Today… there are big names like Fidelity and CoinBase [with] hundreds of millions of dollars of insurance from firms like Lloyd’s of London.”

As a follow up on previous reports, this Bitwise ETF comes following several notable delays from the SEC. Back in August, the SEC said that it would postpone its Bitwise ETF decision – together with two other crypto ETF decisions – until October 13th.