On the heels of the Securities and Exchange Commission’s decision to deny the Winklevoss twins their application for a digital asset-related exchange-traded-fund, bitcoin pundits are wondering what’s thwarting the first ETF underpinned by bitcoin.
Here are some of the main issues that have recently given regulators pause:
One pressing concern lawmakers have is security. Hacks have undermined the crypto market in the past, the most famous being the Mt. Gox. heist in April 2014, where $450 million of bitcoin BTCUSD, -5.89% were stolen. In addressing these concerns, companies such as Coinbase are beginning to offer up custodial offerings—the holding and protection of the underlying asset.