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Regulation

SEC rejects Winklevoss Bitcoin ETF for second time

Cameron Winklevoss, president and co-founder of Gemini, right, speaks as Tyler Winklevoss, CEO and co-founder of Gemini, listens during an interview in New York last December.

A bid to list a bitcoin exchange-traded fund run by Tyler and Cameron Winklevoss was rejected by the SEC over concerns of inadequate trading controls.

A Securities and Exchange Commission filing Thursday noted that regulated bitcoin-related markets are in the early stages of development. "The record before the commission indicates that a substantial majority of bitcoin trading occurs on unregulated venues overseas that are relatively new and that, generally, appear to trade only digital assets," the SEC said in its filing.

The bid to list and trade shares of the Winklevoss Bitcoin Trust was first made in June 2016, and rejected by the SEC in March 2017. The second rejection on Thursday came after SEC officials questioned the reliability of trading and volume data and the ability of bitcoin exchanges to sufficiently police trading. Cboe Global Markets Inc., which would have listed the Bitcoin ETF, failed to show that the underlying market was "resistant to manipulation," according to the filing.

SEC Commissioner Hester Peirce dissented from the decision, saying in a written statement that the SEC's reading of the statute "sends a strong signal that innovation is unwelcome in our markets," and that could have widespread effects beyond the future of bitcoin. "More institutional participation would ameliorate many of the commission's concerns with the bitcoin market that underlie its disapproval order," Ms. Peirce said.

Cameron Winklevoss said in a statement that his firm remains "deeply committed to bringing a regulated bitcoin ETF to market," a sentiment echoed in a statement from Chris Concannon, Cboe president and chief operating officer.

Bloomberg contributed to this story.