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The U.S. Securities and Exchange Commission on Friday denied a request to list what would have been the first U.S. exchange-traded fund built to track bitcoin, the digital currency.


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. Some bitcoin followers on Wall Street viewed approval as unlikely. The decision sets the digital currency, which was seeking broader-scale legitimacy on Wall Street, one step back.


There are still avenues that could allow the Winklevoss brothers, Cameron and Tyler, known for their relationship with the creation of Facebook Inc. another opportunity get their bitcoin ETF proposal greenlighted, including retooling their proposal, market players said.