Bitwise Asset Management has formally withdrawn its application for an exchange traded fund (ETF), ending the firm’s long-running attempt to secure the first ETF approval from U.S. regulators.
The withdrawal was confirmed on Tuesday when Bitwise notified the U.S. Securities and Exchange Commission (SEC) of its decision, coinciding with a move from NYSE Arca, the fund’s sponsor, to withdraw its 19b-4 filing.
The news is a major blow to those that had been eagerly anticipating an ETF fund approval, though few will have been surprised by the decision to withdraw.
It comes after the SEC rejected the application back in October 2019. Despite the SEC saying it would review the proposals following the initial rejection decision, Bitwise has decided to withdraw and attempt a refiling at a later date.
In rejecting the application, the SEC said the proposals were insufficient to prevent market manipulation and other forms of illegality, a long-running theme in the SEC’s approach to funds of this kind.
Matthew Hougan of Bitwise was quoted by CoinDesk saying the decision would allow the firm time to review its approach to developing an ETF that might one day satisfy the needs of regulators:
This is the next step towards our long-term goal of bringing a [BTC] ETF to market, and we plan to refile our application at an appropriate time. We are currently working hard on answering the questions that the SEC raised in its 112-page response to our initial filing.
“We remain fully committed to the development of a BTC [exchange-traded product], and will update you when we have more details on our timeline.”
The withdrawal means only one ETF proposal remains on the table – the Wilshire Phoenix proposal, which attempts to blend crypto with U.S. Treasury bonds.
While some BTC cheerleaders still hope this will impress the SEC, chances are high that the regulator will likewise reject the proposals, with decision day set for February 26.
To date, the securities regulator has rejected dozens of proposals for a crypto ETF, citing concerns over market abuse and illegal behavior among other reasons for refusing to give the go-ahead to any of the proposed funds.
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