The Winklevoss Bitcoin ETF may be closer to getting SEC approval.

New changes to the Bitcoin ETF have beefed up the fund's oversight and security, two things that should improve the odds of winning Securities and Exchange Commission (SEC) approval.

The Winklevoss Bitcoin Trust (BATS: COIN) filed a seventh amendment to its S-1 request with the SEC to create an exchange-traded fund based on Bitcoin on Tuesday. It's been more than three years since the initial filing, but this year significant progress has been made.

In particular, the BATS Exchange, where the Winklevoss Bitcoin ETF will trade, filed for a rule change with the SEC in June to allow the creation of a derivative based on the digital currency. That filing started a clock that requires the SEC to rule one way or the other by March 2017.

So it's not surprising that the folks behind the Winklevoss Bitcoin Trust are doing all they can to convince the decision-makers at the SEC that their Bitcoin ETF will be financially sound.

The latest amendment shows that the Winklevoss twins, Cameron and Tyler, have enlisted some top-tier partners to bolster confidence in their Bitcoin ETF.

Financial services company State Street Corp. (NYSE: STT) will serve as the administrator for the Winklevoss Bitcoin ETF, while accounting firm Burr Pilger Mayer will serve as auditor.

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Other changes in the filing were intended to clarify how the Winklevoss ETF will operate and how it will safeguard the Bitcoin assets it holds…

These Changes Make the Winklevoss Bitcoin ETF More Trustworthy

One change is how the net asset value (NAV) of the Winklevoss Bitcoin ETF will be determined each day. Instead of being based on the 4:00 p.m. Bitcoin spot price at the Gemini Bitcoin exchange (also operated by the Winklevoss twins), the NAV will be based on Gemini's 4:00 p.m. auction Bitcoin price.

This auction mechanism, similar to the closing auction that takes place on other U.S. exchanges, "allows participants to engage in thorough price discovery while concentrating liquidity and trading volume at a single moment each day," according to the new S-1 filing.

Another significant change concerns the security of the digital currency the Winklevoss Bitcoin Trust will hold in cold storage (offline). The latest filing says that the signatories with the power to move the Trust's bitcoins will be subject to ongoing background checks.

In response to criticism over the summer that the Winklevoss Bitcoin ETF lacks insurance, a concern in the event that bitcoins are lost or stolen, the Trust clarified its position.

"The Trust does not currently intend to insure its bitcoin. The Custodian does, however, maintain insurance in the form of a fidelity bond with regard to its custodial business on such terms and conditions as it considers appropriate in connection with its custodial obligations," the document notes. "The Custodian's statutorily required fidelity bond coverage includes, among other things, insurance against employee theft, computer fraud, and funds transfer fraud."

Critics have also suggested that the drawn-out approval process is a bad omen for the Winklevoss ETF, but that's not necessarily true…

Why the Winklevoss ETF Has Taken So Long to Win Approval