The agency’s decision surprised many due to previous optimism

The Securities and Exchange Commission (SEC) rejected Bitwise Asset Management’s efforts to launch a bitcoin exchange-traded fund (ETF). The agency said that Bitwise’s proposal failed to meet legal requirements tied to market manipulation and other concerns. However, the SEC blamed NYSE Arca instead of Bitwise for the rejection.

The agency wrote: “The Commission is disapproving this proposed rule change because, as discussed below, 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.’”

The decision comes two months after the SEC postponed its decision on the Bitwise Bitcoin ETF Trust and VanEck SolidX Bitcoin Trust.

SEC Rejects Bitcoin ETF from Bitwise Asset Management

This is the latest in a string of rejections by the SEC.

In this case, Bitwise proposed its ETF with NYSE Arca in January 2019. The firm would have been the first in the United States to launch an ETF tied to Bitcoin. Just two days ago, Matt Hougan, managing director and global head of research at Bitwise expressed optimism in an interview CNBC.

“We’re closer than we’ve ever been before to getting a Bitcoin ETF approved,” he said in an interview.

VanEck pulled its ETF proposal in September. VanEck’s Bitcoin ETF had ties to SolidX and Cboe BZX.

The only active Bitcoin ETF proposal today is that of Wilshire Phoenix and NYSE Arca.

[Related: Could Crypto ETFs Finally Come In From The Cold?]