The Securities and Exchange Commission has rejected the Winklevoss bitcoin ETF.
In a public notice the SEC stated:
"As discussed further below, the Commission is disapproving this proposed rule change because it does 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."
You can read the full rejection here: https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf
The Crash Begins
Bitcoin had hit well over $1300 earlier today ($1336.29 on the dinbits index) in anticipation of the decision. The digital asset has fallen now to $1086 and the news is still spreading having been release only 44 minutes ago.
Note, This is Meaningless
The SEC did not reject bitcoin, it rejected the Winklevoss ETF and it only rejected it as it was amended.
"... the Commission does not find that the proposed rule change, as modified by Amendment Nos. 1 and 2, is consistent with the requirements of the Exchange Act ..."
This doesn't affect anything but the Winklevoss ETF and the ability for new investors to buy bitcoin shares of Winklevoss bitcoins on other non-bitcoin exchanges. The loser here is Winklevoss, not bitcoin.
Unfortunately, people are silly and the crash should continue. Expect it to level out around $1000 and be back up around $1100 by next week once everyone realizes how little this rejection means for the current industry.
An approval would have been good for the business, but the rejection means nothing. If anything it's a positive thing since it highlights what needs to be considered for a future ETF approval.
That said, it still kind of sucks.