Login | Sign up |Help NewsANZ appoints e-commerce exec to run digital transformation projectTVPSD2, Open Banking, APIs the customerJobsSenior Account Manager - Securities FinancingEventsSAP Financial Services Forum 2017 » View all blogs Next blog » 44975Retired Member Facebook Twitter LinkedIn Reddit Google+ email Disruption in Retail Banking Bitcoin ETF Bites the Dust, Needs More Security When the SEC, last month, announced the proposal from Winklevoss Bitcoin Trust was declined, they made a clear statement to the cryptocurrency community: more security is needed.In their terms, they did not "find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest."Of course, that sent investors into a tizzy, serving up a 15% loss and sending Bitcoin down to $1050 from its recent high of nearly $1300.

It lived to see a new day, of course, and since, the price of Bitcoin has recovered rather nicely.As of this writing, it sits at $1237.I wanted to give it some time before putting together a reaction on the news simply because Bitcoin, and cryptocurrencies in general, are highly volatile.ethereum pool mining guidePricing isn’t strictly subject to scarcity, and demand tends to lean towards the fickle.ethereum new zealandAn SEC decision sends investors on a rollercoaster ride, and many, seeing the immediate bottom, jumped back on board to nail down a nice short-term profit.bitcoin etf redditIn this way, Bitcoin is both volatile and resilient.Cryptocurrencies will not die based on bad news out of the SEC.It is international in a way which transcends a single agency, even when that agency is the SEC.

The threat to cryptocurrency is not external organizations, though such organizations, based on their acceptance, could certainly help it mainstream.The real threat to cryptocurrency is what’s behind the rejection.The real threat is the lack of preparedness for external cybercrime.In order for Bitcoin, or other cryptocurrencies, to gain mainstream traction and transform the way the world transacts, outside of its niche community, the movement will need to find a way to lessen the exposure to external risk.Winklevoss has been working on this proposal for several years, and along the way, they continue to restructure it.They, and others, will continue to work to gain approval for an ETF, and the best way to help their cause is to address the structural challenges associated with the concept.Until they do so, it is likely we will see more failed attempts.Such attempts shouldn’t be taken as a reason to dump the currency.It should be taken in the context in which it exists: government agencies need more proof, more security, and more upside to mainstream a groundbreaking, innovative disrupter.

Risk & regulationInnovation Report abuse Comment on this story Latest posts from See full profile » CardsSecurityBlockchainTrade executionMobile & onlinePaymentsRisk & regulationPost-trade & opsSibosRetail bankingWholesale bankingInnovationTransaction bankingStart upsFinancial inclusionBrexit May 2017 (1)April 2017 (3)March 2017 (9)February 2017 (12)January 2017 (2)2016 (112)2015 (300)2014 (395)2013 (448)2012 (289)2011 (316)2010 (226)2009 (231)2008 (217)2007 (118)2006 (6) Who's commenting on Retired's postsThe Securities and Exchange Commission said on Friday it had rejected an application to create an exchange-traded fund tied to the price of Bitcoin.Within a few minutes of S.E.C.’s announcement, the price of a single Bitcoin tumbled more than 15 percent, to around $1,060.The price soon recovered some of the lost ground, however.The decision was a significant setback for Tyler and Cameron Winklevoss, twin brothers who began working on a proposed Bitcoin exchange-traded fund, or E.T.F., four years ago.

An exchange-traded fund tracks an index, or basket, of assets but trades like a stock.The commission said it was rejecting the Winklevoss Bitcoin Trust because the markets where Bitcoin are currently traded are largely unregulated.The lack of such regulation, the commission said, raised “concerns about the potential for fraudulent or manipulative acts and practices in this market.”The price of Bitcoin has climbed sharply in recent weeks in anticipation of the commission approving the Winklevoss brothers’ fund, with the price of a single Bitcoin surging to a record high above $1,300.Bitcoin aficionados had hoped that an exchange-traded fund would help bring the virtual currency into the mainstream by making it available to retail investors through brokerage firms like Charles Schwab and eTrade.Several other companies have also applied to operate Bitcoin exchange-traded funds, and the S.E.C.could reach a different decision on those proposed funds.But the commission’s broad concern about the unregulated nature of Bitcoin markets suggests that an approval may be unlikely in the near future.“It seems as if the other E.T.F.s in the pipeline for the S.E.C.

are facing the same stone wall,” Charles Hayter, founder of the virtual currency data provider CryptoCompare, said on Friday.The commission wrote in its decision that Bitcoin was “still in the relatively early stages of its development and that, over time, regulated Bitcoin-related markets of significant size may develop.”The commission added that it could reconsider a Bitcoin exchange-traded fund if more mature markets developed.Tyler Winklevoss said that he and his brother were not giving up on the exchange-traded fund.“We began this journey almost four years ago, and are determined to see it through,” he said.“We agree with the S.E.C.that regulation and oversight are important to the health of any marketplace and the safety of all investors.”The twins rose to fame through their legal tussles with Mark Zuckerberg, the founder of Facebook.More recently, the brothers have bought significant quantities of Bitcoin and have dedicated themselves to promoting the virtual currency and bringing it into the mainstream.The twins already won regulatory approval from New York authorities for their Gemini Exchange, where virtual currencies can be bought and sold by professional traders.

would have been tied to the price of Bitcoin on the exchange.Most Bitcoin, however, are traded outside the United States, beyond the reach of American regulators.The virtual currency emerged in 2009 and was celebrated for its ability to circumvent government authorities.Since then, Bitcoin has gained prominence partly because of its use on shadowy online black markets, where it is exchanged for drugs, and in countries like China and Venezuela, where some citizens are looking to evade government oversight.Over time, it has become clear that Bitcoin’s growth prospects are probably limited if it is not easily available through regulated institutions to ordinary investors.Jerry Brito, executive director of the Coin Center, a virtual currency advocacy group, said that the S.E.C.’s decision presented a problem for the further development of the technology.“How do we develop well-capitalized and regulated markets in the U.S.and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?” Mr.