SEC to review decision rejecting bitcoin ETFs

Published: August 25, 2018
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Representation of the Bitcoin virtual currency standing on the PC motherboard is seen in this illustration picture, February 3, 2018.
PHOTO: REUTERS

Representation of the Bitcoin virtual currency standing on the PC motherboard is seen in this illustration picture, February 3, 2018. PHOTO: REUTERS

NEW YORK/WASHINGTON: The US Securities and Exchange Commission said on Thursday it will review a decision by its staff to block nine bitcoin-based exchange-traded funds from coming to market.

Staff at the SEC on Wednesday rejected applications for new funds from three companies, suggesting they were not yet convinced that the products would not be subject to fraud or manipulation.

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But the SEC’s four commissioners will review those decisions, according to letters the SEC posted on its website.

SEC staff have delegated authority to make a decision on such applications, meaning the commissioners and the SEC chairman have the power to review the decision if they desire.

The commissioners had previously voted 3-1 to reject another bitcoin ETF application, with Republican commissioner Hester Peirce dissenting on the basis she felt doing so stifled innovation.

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The virtual currency can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government. A fund holding the currency could attract more investors and push its price higher.

Bitcoin was trading up nearly 2 per cent at $6,480 on the Luxembourg-based Bitstamp exchange on Thursday after the SEC posted the letters.

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