The Securities and Exchange Commission on Friday nixed a proposed rule change that would have cleared the way for the first exchange-traded fund to track the digital currency bitcoin. The SEC said the proposed Winklevoss Bitcoin Trust ETF wasn’t consistent with rules that required a security be “designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.” In order for such a product to have met this standard, the SEC wrote in a filing, “the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.” The SEC said “significant markets” for bitcoin were unregulated. Many bitcoin followers on Wall Street had viewed approval as unlikely.
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