SEC Denies Bitcoin Exchange Traded Fund March 27, 2017 In the cryptocurrency world, there is never a dull moment. Early in March this year, Sec disapproved Winklevoss ETF proposal. Some time back, the Winklevoss brothers were in a feud with Mark Zuckerberg, claiming there were the original innovators of Facebook. This time round, there are in the spotlight after the Security Exchange Commission disapproved their proposal to list and trade shares of Bitcoin tied ETFs on the BXZ exchange. The commission rejected the Winklevoss’ Bitcoin-tied ETF because the proposal was not consistent with the set legal requirements of SEC. Well, the main reasons were because the currency carries a high risk of fraud and the fact that it not regulated. It is not the first time Cameron and Tyler Winklevoss have tried to list the Bitcoin tied product on the Bats BZX Exchange. They have been trying to get the
product listed since mid-2013. At the time when SEC declined the ETF proposal, Bitcoin’s price reduced by 15-18%. According to the commission, the proposal was not in line with the rules laid out by the Exchange Act, as per Section 6(b) (5). The rules demand that a national security exchange to be designed in a way that does not promote fraudulent and manipulative acts. The exchange should protect both the investors and the public interest.
The Problem with Bitcoin
The issue with Bitcoin is that it is not transparent being one of the digital currencies facing a major security challenge. It has a high fraud risk and it unregulated. Recent reports suggest that hackers have gained access to at least one-third of Bitcoin exchanges. In less than four years after their emergence, nearly half of the Exchanges had shut down.
For example, sometime in 2016, hackers hit Bitfinex Bitcoin exchange, taking with them about $70 million of Bitcoin. In another scenario, hackers took over Tokyo’s MtGox exchange and made away with roughly $350 million in 2014. Bitcoin poses a major security threat because the currency is not untraceable in case theft happens. If someone steals your debit cards and credit cards, you may be able to get your cash back if you report the theft. Bitcoin is different because once someone accesses your private key; they can transfer the money to their accounts. Such a transaction is permanent ad irreversible, a typical thing with Bitcoin transactions. The other issue is that Bitcoins’ prices are extremely volatile and unpredictable. Some financial experts say that the reason for this is because Bitcoin does have any real value and its market size is relatively small.
Transparency in Cryptocurrency World For there to be safety in this era of digital currency, there is a need for transparency. This transparency can only be found in digital currencies with a secure blockchain, such as that of OneCoin. OneCoin is one unique cryptocurrency as it ensures its users do not participate in criminal activities. The cryptocurrency management does this by monitoring its clients and sticking to the rules set by the National Exchange. For instance, to ensure there is no identity theft, money laundering, terrorist financing and financial fraud, the company uses the KYC (Know-your-customer) system.
TomCrypto – Cryptocurrency Enthusiast and Blogger