The Securities Exchange Comission in the United States of America has rejected the proposed Bitcoin ETF (Exchange Traded Fund) application by the Winklevoss brothers and the regulators cited the main reason as being the lack of regulation around Bitcoin.
"Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity trust ETPs—agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market—the Commission does not find the proposed rule change to be consistent with the Exchange Act" said the SEC in a statement explaining their decision to reject the application by the Winklevoss Bitcoin Trust.
Had the SEC approved the application then anyone would be able to invest in Bitcoin by purchasing shares in the ETF trading on a USA stock exchange instead of buying Bitcoins directly.
The decision did have an impact on the Bitcoin price as it dropped approximately 22% from $1,295.00 to as low as $1,000 as soon as the news broke.
“We remain optimistic and committed to bringing COIN [the ETF’s proposed ticker] to market, and look forward to continuing to work with the SEC staff. We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors.” said Tyler Winklevoss on the ETF application rejection in an e-mail statement to Forbes.
Many who are involved daily and working on solutions using Bitcoin and who have been cautioning against the Bitcoin ETF. One such person is Vinny Lingham who in a post on his website prior to the decision being made stated that "Overall, I’m not against the idea of the ETF — I think it will be a good thing but I don’t believe that 2017 is the year for it."