[2018-07-28] SEC Commissioner: Bitcoin Is Regulated And Mature Enough To Have An

[moriskarlov]

On July 26, the US Securities and Exchange Commission (SEC) officially rejected the Bitcoin exchange-traded fund (ETF) application filed by the Winklevoss twins, citing lack of measures in the ETF to prevent price manipulation.

The official SEC announcement read:

“The Commission addresses each of these arguments below. In Section III.B, the Commission addresses BZX’s assertion that bitcoin and bitcoin markets, including the Gemini Exchange, are uniquely resistant to manipulation and finds that the record before the Commission does not support such a conclusion.”

The SEC further emphasized that the proposed ETF by the Winklevoss twins, who oversee a major US crypto exchange known as Gemini, does not have sufficient tools to identify and deter fraud and manipulation that could impose a negative impact on the price movement of Bitcoin.

Almost immediately after the release of the SEC’s statement, SEC commissioner Hester Peirce expressed her disappointment with the decision of the agency to reject the bitcoin ETF filed by the Winklevoss twins, noting that Bitcoin, as an asset, is regulated and matured enough to be worthy of US markets.

“Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets,” Peirce said in a personal statement, referring to an official public statement she published to refute the disapproval of the Winklevoss Bitcoin ETF.

Peirce added that the premature decision of the SEC undermined investor protection by dismissing the institutionalization of the Bitcoin market, which has seen an increase of adoption by regulated financial institutions such as Goldman Sachs, JPMorgan and Morgan Stanley over the past several months.

“In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order,” Peirce said.

See more - https://www.forbes.com/sites/youngjoseph/2018/07/27/sec-commissioner-bitcoin-is-regulated-and-mature-enough-to-have-an-etf/#46a991774164

[chaoscoinz]

It would be great if they could pass it through, the excitement would certainly cause the market prices to soar. This potential to rise at the slightest bit of stimuli is one of the very reasons for the proposals rejection.
   I believe that in the fututre, a coin of Bitcoin's magnitude will emerge, solving this very dilemma that's hindering any progression from cryptocurrencies being adopted by the mainstream general public.
 

[buwaytress]

I'm getting lost in the rhetoric here. Bitcoin isn't mature or regulated enough? How on earth does the entry of more institutional players mean a more regulated Bitcoin market? Are we saying that if Wall Street whales and big bankers own the majority of Bitcoin, and only then can the market be controlled? Oops I meant regulated?

Just come out and say it, you'll only allow systems that fit into the corrupt model. If it lets you make guaranteed profit at the expense of the normies, then it's fine.

[gentlemand]

Apparently two of the five commissioners in the SEC will be moving on and replaced by the end of the year. That may have a bearing on things. I'm not totally sure who decides what but that's a large percentage of attitude that could possible change.

If I were in the driving seat I wouldn't be too turned on by the Winklevoss proposal either. In Wall St terms they're nobodies and I don't think they ever got around  to nominating any type of insurance. We know proper security is more dependable than some insurance company who'll do all they can not to pay. Others may not.

[Kprawn]

I'm getting lost in the rhetoric here. Bitcoin isn't mature or regulated enough? How on earth does the entry of more institutional players mean a more regulated Bitcoin market? Are we saying that if Wall Street whales and big bankers own the majority of Bitcoin, and only then can the market be controlled? Oops I meant regulated?

Just come out and say it, you'll only allow systems that fit into the corrupt model. If it lets you make guaranteed profit at the expense of the normies, then it's fine.

You have that analysis spot on. 

These Wall Street boys have been rigging the "system" for so long, that they insist that they get protection from the SEC to protect

them against "uncontrollable" commodities like Bitcoin.  The Bitcoin boys are not welcome in the Sand Pit, because they are

not willing to give up their control. 

[1Referee]

What I am getting from this and other statements and articles (by looking beyond the obvious) is that they want to avoid dealing with a situation similar to what happened with the futures markets last year. It creates an unhealthy and unfair market, all of which will contribute to manipulation and a massive loss in value for investors afterwards.

It's a tough decision to make because there is no easy way to not boost Bitcoin's spot market by announcing that you as regulator agrees to have an ETF to go live.

For once I don't think the SEC should be blamed for being extremely conservative. I looked through the ETF's and honestly speaking, not in a hundred years would I allow the WV ETF to be approved. People can act disappointed all they want, but Bitcoin's market is far better off without hillbilly ETF's being approved.

[cryptofonia]

Apparently two of the five commissioners in the SEC will be moving on and replaced by the end of the year. That may have a bearing on things. I'm not totally sure who decides what but that's a large percentage of attitude that could possible change.

If I were in the driving seat I wouldn't be too turned on by the Winklevoss proposal either. In Wall St terms they're nobodies and I don't think they ever got around  to nominating any type of insurance. We know proper security is more dependable than some insurance company who'll do all they can not to pay. Others may not.

Why do two of five commissioners? As I've read there were 4 representatives, 3 disapproved Bitcoin ETFs proposal submitted by Winklevoss and 1 representative has mad objection against decision of other 3. Right?

[gentlemand]

Why do two of five commissioners? As I've read there were 4 representatives, 3 disapproved Bitcoin ETFs proposal submitted by Winklevoss and 1 representative has mad objection against decision of other 3. Right?

I could be talking completely out of my arse. That's something I read elsewhere.

Either way there's now at least one commissioner fully open to the idea. If I were a commissioner I would not have approved the Winklevoss application in the state it was in so I presume she was disagreeing with the rejection of the principle.

[figmentofmyass]

Peirce added that the premature decision of the SEC undermined investor protection by dismissing the institutionalization of the Bitcoin market, which has seen an increase of adoption by regulated financial institutions such as Goldman Sachs, JPMorgan and Morgan Stanley over the past several months.

“In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order,” Peirce said.

it's nice to see some dissent from the official SEC position. but can anyone explain to me the logic that institutional participation (via ETFs?) would ameliorate their concerns about things like market manipulation in the spot markets? does she think the spot markets are gonna start following some US-regulated security market? seems unlikely.

[aso118]

Peirce added that the premature decision of the SEC undermined investor protection by dismissing the institutionalization of the Bitcoin market, which has seen an increase of adoption by regulated financial institutions such as Goldman Sachs, JPMorgan and Morgan Stanley over the past several months.

“In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order,” Peirce said.

it's nice to see some dissent from the official SEC position. but can anyone explain to me the logic that institutional participation (via ETFs?) would ameliorate their concerns about things like market manipulation in the spot markets? does she think the spot markets are gonna start following some US-regulated security market? seems unlikely.

I think it is more to do with increasing depth and liquidity of the market. If the market is liquid and does not swing about following every large trade, it will be more difficult for market manipulators to affect the price. I am not saying that market manipulation will end; it will only get more difficult.

[DNRG]

I'm getting lost in the rhetoric here. Bitcoin isn't mature or regulated enough? How on earth does the entry of more institutional players mean a more regulated Bitcoin market? Are we saying that if Wall Street whales and big bankers own the majority of Bitcoin, and only then can the market be controlled? Oops I meant regulated?

Just come out and say it, you'll only allow systems that fit into the corrupt model. If it lets you make guaranteed profit at the expense of the normies, then it's fine.

Bitcoin will never be mature or regulated enough to truly be part of any SEC-overseen markets or whatever.

I mean, let's face it, you can't regulate bitcoin. It's decentralized. If every miner decided, they could end or manipulate bitcoin at any time just by not mining or pumping the hash rate.

That spells trouble for the government, for any government.

I honestly can't see bitcoin being taken seriously by any full governmental body or agency.

[richardsNY]

I mean, let's face it, you can't regulate bitcoin. It's decentralized. If every miner decided, they could end or manipulate bitcoin at any time just by not mining or pumping the hash rate.

How is this different from gold? There may be a few fundamental differences but in larger lines it's quite similar.

I honestly can't see bitcoin being taken seriously by any full governmental body or agency.

It's already being taken seriously. Why else do you think they are working hard to regulate the ecosystem around Bitcoin? Back in the days governments didn't take Bitcoin seriously, but that has definitely changed. No one can avoid Bitcoin anymore. It's in everyone's face and governments have to deal with it. Bitcoin won't be going anywhere, neither will other cryptos.

[pixie85]

It would be great if they could pass it through, the excitement would certainly cause the market prices to soar. This potential to rise at the slightest bit of stimuli is one of the very reasons for the proposals rejection.
   I believe that in the fututre, a coin of Bitcoin's magnitude will emerge, solving this very dilemma that's hindering any progression from cryptocurrencies being adopted by the mainstream general public.
 

They eventually will. If they don't do it now they will give guidelines for future proposals like did with Winklevoss ETF. THe problem with that one was they never changed anything and only filed a complaint that didn't achieve anything. Smart people would try to make it more secure, make the project bigger and safer and then try again.

[BitHodler]

They eventually will. If they don't do it now they will give guidelines for future proposals like did with Winklevoss ETF. THe problem with that one was they never changed anything and only filed a complaint that didn't achieve anything. Smart people would try to make it more secure, make the project bigger and safer and then try again.

I wonder what the reason was for the SEC to have it take so long to reject their review. If indeed nothing has changed, there shouldn't be too much time and effort invested in the whole process.

It reminds me of my local government to have a license approved to renovate a small property. It took them nearly 6 months to reject it, and another 4 months to have them look into it for a second shot, which they again rejected.

It's almost like they on purposely slow down everything in an attempt to make it seem like it costs them a significant amount of time, while in reality it could be done in a matter of days.

[gentlemand]

It's almost like they on purposely slow down everything in an attempt to make it seem like it costs them a significant amount of time, while in reality it could be done in a matter of days.

You betcha. Why make themselves out to be efficient? They want to appear monolithic and unapproachable.

I would guess they probably binned it after sneering at it for a few minutes all that time ago, but if they didn't draw it out then that sets up expectations for the stuff that does require some proper consideration.

A public servant's first duty is to cover their own arse. Everything else is a distant second.