Wilshire Phoenix, a New York-based asset management company, responded to the U.S. Securities and Exchange Commission (SEC) rejecting its Bitcoin (BTC) exchange traded fund (ETF) project.
The cabinet says it is “very disappointed” with the SEC’s decision, noting that it has gone to great lengths to ensure the SEC’s expectations are met:
“We have done everything in our power to draw the attention of the SEC to this important matter, including by undertaking an in-depth analysis which has been made available to SEC staff, by submitting key data and by offering to provide Additional information to aid in listing an essential ETP regulated bitcoin code in the United States. Unfortunately, the order shows that not all of these efforts have received the attention of the SEC. “
SEC decision continues to threaten US investors
Wilshire Phoenix submitted its United States Bitcoin and Treasury Investment Trust project to the SEC in January 2019. The company described the fund as “providing[ing] Investors exposed to Bitcoin in a more efficient, convenient and less volatile way than buying standalone Bitcoin. “
Although the firm made six changes to its request in 13 months, the SEC rejected Wilshire Phoenix’s request on February 26, citing market manipulation and investor protection concerns.
William Herrmann, Managing Director of Wilshire Phoenix, responded by arguing that a regulated Bitcoin ETF would provide retail investors with a safer way to gain exposure to Bitcoin, adding that demand for cryptocurrency would continue to grow regardless of the SEC’s decision:
“Many retail investors are already investing in this product and investor demand continues to grow every day. Our ETP was created to offer investors exposure to bitcoin via a regulated and transparent vehicle which also mitigates volatility. In my opinion, the Commission has done a disservice to the public by denying this request. “
SEC Won’t Approve Products Offering Bitcoin Exposure
On February 26, SEC Hester Peirce, colloquially known as “Crypto Mom” in the cryptocurrency community, issued a dissenting statement in response to the decision.
Commissioner Says SEC “Applies Single Strengthened Standard” to Exchange Law on Cryptocurrency Deposits, Adding Order is “Last of Long Series of Refusal Orders” “issued for” Bitcoin related products “.
As such, Peirce concludes that the SEC is not prepared to approve “any product” offering exposure to Bitcoin:
“This line of refusal leads me to conclude that this Commission is not prepared to approve the list of any product that would give access to the bitcoin market and that no deposit will meet the constantly changing standards that this Commission insists on applying bitcoin. related products – and only bitcoin related products. “
Herrmann echoed Peirce’s assertion, saying, “The SEC has created a test for [exchange-traded products] this is clearly incompatible with the law on exchange. “
