The Winklevoss twins may have suffered a blow last week when their proposal to launch a Bitcoin-based exchange-traded fund (ETF) was rejected by the Securities and Exchange Commission (SEC) for the second time. However, this setback doesn’t appear to have deterred them from pursuing their goal.
A Market Easily Manipulated
In the face of a difficult climate for cryptocurrencies, with the market still in the grips of its latest slump and U.S regulators exhibiting reluctance to give them the legitimacy they need for significant growth, the twins sounded a defiant tone when speaking with Bloomberg.
“Wall Street is taking cryptocurrencies seriously, however, the vast majority of Wall Street firms are still not participating in the cryptocurrency market, which remains primarily a retail-driven market… This will change over time, but it will take time.”
The twins, who operate the exchange Gemini Trust Co. still intend on growing the business, even if the majority of Wall Street isn’t yet on their side.
Virtual Commodity Association
Without the backing of the SEC and the security that comes from a rigorous regulatory framework, traditional investors are unlikely to change their stance on cryptocurrencies anytime soon. Both Gemini and Cboe Global Markets, last year launched their own Bitcoin futures contracts, a step many hoped would be the first toward opening the crypto market to institutional investments. Had the SEC given ETF approval, the crypto market would have been opened to most institutional investors, such as pension funds.
Gemini has doubled its total worldwide staff over the last 6 months, with plans to double again by the end of the year. One of their new staffing additions was Robert Cornish, who was once chief information officer of the New York Stock Exchange. He will be Gemini’s first chief technology officer.
Earlier in March, the Winklevoss twins submitted a proposal to create the Virtual Commodity Association. This would have been a self-regulatory organization to police the largely lawless digital currency markets. The hope is that this non-profit will be able to develop industry-wide standards and work with regulators to promote transparency.