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The Securities and Exchange Commission (SEC) has just rejected Wilshire Phoenix’s application for a cryptocurrency ETF.

The SEC stated New York-based Wilshire Phoenix had not proven the Bitcoin (BTC) market is sufficiently resistant to market manipulation. Wilshire, a newcomer to the financial services industry, first applied for the ETF last summer with NYSE Arca.

The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement 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

This is the latest knockback for companies coming to market with an ETF. Bitcoin and the rest of the crypto majors have been under pressure all session and this is surely one of the contributing factors. The key issue for the SEC seems to be the potential price manipulation of Bitcoin. Even the fact that Bitcoin futures and options products have been launched by Bakkt and CME has not made a difference. Maybe if all the crypto exchanges are regulated there could be more successful application.