Bitwise applied for ETF registration in January 2019. In March of the same year, it had released the Bitwise Report on exchange volume, claiming that 95% of trading volume is fabricated.
The finding was used by the company as an argument for the SEC to accept the ETF. By disregarding the majority of the exchange volume, the firm maintained that price formation for BTC occurred mostly on regulated exchanges.
A Jan. 14 form with the United States Securities and Exchange Commission (SEC) confirms that Bitwise Asset Management requested the withdrawal of its application for a Bitcoin Exchange Traded Fund (ETF). This is the second major ETF withdrawal in recent months following similar actions by VanEck.
The reasoning did not convince the commission, which rejected the proposal in October 2019. One month later, however, the regulator decided to review its decision.
It is unclear why Bitwise decided to withdraw the ETF right now. Bitwise representatives did not immediately reply to a Cointelegraph comment request. The story will be updated once more information is available.
A high-profile proposal by VanEck followed a similar path as the firm retracted its application in September 2019.
Roadblocks to an ETF
An ETF is a stock-like fund tracking a particular asset or index of assets. Its shares can be freely traded during the day and generally closely follow the underlying asset’s price. A Bitcoin ETF would thus enable institutional and retail investors alike to gain direct exposure to the currency – while trading within the bounds of regulated traditional exchanges.
There were many historic attempts at registering a Bitcoin ETF, but they were always rejected by the SEC. Their primary concerns remain those of difficult custody and the potential for market manipulation. Though SEC Chairman Jay Clayton noted in a September 2019 interview that progress was being made, he remarked that “more work needs to be done.”
The regulator is set to rule on another ETF proposal by Wilshire Phoenix by February 2020.
United Nations Says Stay Away From North Korean Crypto Conference
The United Nations has warned that attending a North Korean cryptocurrency conference in February is likely to constitute a sanctions violation, according to a report by Reuters on Jan. 15.
The report follows last week’s indictment of Ethereum Foundation researcher Virgil Griffith on charges of conspiracy to violate the International Emergency Economic Powers Act.
Griffith traveled to North Korea for its first blockchain and cryptocurrency conference in April last year. While there, he and other conference attendees allegedly discussed cryptocurrencies and blockchain technologies. The United States government contends that Griffith’s presence could have aided North Korea in skirting international sanctions.
Prosecutors in the Griffith case say that he had been encouraging other United States citizens to attend the conference this year.
The conference website states that individuals from any country except for South Korea, Japan and Israel are allowed to visit, adding that visitor passports will not be stamped:
“We will provide a paper visa separated from your passport, so there will be no evidence of your entry to the country. Your participation will never be disclosed from our side unless you publicize it on your own.”
Sanctions experts say “don’t go”
North Korea has been subject to U.N. sanctions since 2006 over its nuclear and ballistic missile programs. Among other things, these sanctions oblige countries to prevent “financial transactions, technical training, advice, services or assistance”, if it could contribute to the missile programs or help to evade sanctions.
The alleged “explicit discussions of cryptocurrency for sanctions evasion and money laundering”, would seem to be in direct violation of this sanction.
As Cointelegraph previously reported, the North Korean-affiliated hacking group Lazarus has seemingly been deploying new viruses and malware to steal cryptocurrency. Lazarus has been targeting cryptocurrency users for some time, stealing over half a billion dollars worth, between early 2017 and October 2018.