The Securities and Exchange Commission (SEC) has officially rejected a proposal by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, for the first-ever cryptocurrency ETF.

The Winkleswoss twins previously had an application rejected by the SEC for “The Winklevoss Bitcoin Trust”. However, in June they submitted and updated version in June 2018. Once again this has been rejected by the SEC.

The most recent proposal from the Winklevoss  Twins stated that

bitcoin markets, including the Gemini Exchange, are “uniquely resistant to manipulation.” It also highlighted issues of fraud and investor protection.

A number of reasons have been stated by the agency which is currently reviewing a number of similar applications are yet to approve a bitcoin or Cryptocurrency ETF. The SEC have asked for public feedback on bitcoin-based products such as bitcoin ETF’s, as well as publishing a letter in January pointing to “significant investor protection issues that need to be examined” before sponsors can offer these funds to retail investors.

The SEC emphasized that the disapproval does not determine if they believe bitcoin or blockchain has a fundamental value or a purpose. They focused more on their obligation protect investors and ensure that fraud of market manipulation does not occur.

On of the main reasons, as specified by the SEC, is that the majority of bitcoin trades happens outside the U.S. meaning it would be difficult to police the entire market.

As for assertions that bitcoin is uniquely resistant to manipulations, the SEC “finds that the record before the Commission does not support such a conclusion.”

The SEC refused to comment on the other bitcoin ETF application which has been submitted by VanEck SolidX Bitcoin foundation.

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