When Bitwise filed its registration statement with the SEC for a Bitcoin ETF in January, it said the filing responded to questions that the agency had raised about previous bitcoin ETF filings, but the SEC apparently did not agree.
After receiving a filing from the NYSE Arca about a proposed rule change to list and trade shares of the Bitwise Bitcoin ETF, the agency delayed a decision on the Bitwise ETF in late March, along with a decision on the VanEck SolidX Bitcoin Shares. It said it needed more time and by May 16 it expected to “approve or disapprove or institute proceedings” to help make its decision.
The SEC has apparently decided on the latter after receiving an amendment to the NYSE Arca proposed rule change earlier this month and a report from Bitwise that 95% of current spot Bitcoin trading is fake, once again delaying a decision on the Bitwise Bitcoin ETF. The proposed Bitwise Bitcoin ETF Trust would track an index that draws prices from only those cryptocurrency exchanges that Bitwise says do the “majority of currently verifiable Bitcoin trading.”
The agency, which has already received 25 comments on the proposal — most of them negative — is again seeking public comment, this time on 14 questions, many asking about potential manipulation of the Bitcoin market.
Among the questions in its notice: whether commentators agree with assertions made by the NYSE Arca and Bitwise that the Bitwise Bitcoin ETF is uniquely resistant to manipulation, that the 10 Bitcoin trading venues exchanges it would reference represent “substantially all of the economically significant Bitcoin trading volume in the world” and that “a significant, regulated and surveilled market for Bitcoin futures exists” to prevent manipulation.