Page 24 - ARUBA TODAY

Monday 13 March 2017 BUSINESS
A24

Twins trumped: Winklevoss’s lose bid for bitcoin trade fund

MARCY GORDON though bitcoin doesn’t
AP Business Writer guarantee anonymity,
WASHINGTON (AP) — The since it documents every
irrepressible Winklevoss transaction in a public fo-
twins, known for having rum.
sued Mark Zuckerberg over Exchange-traded funds
the idea for Facebook, have grown in popularity
have suffered a setback among individual investors.
from federal regulators in They track a market index,
their push to expand the a commodity, bonds or a
use of bitcoin to a wider basket of assets. Unlike mu-
universe of investors. tual funds, ETFs trade like
The Securities and Ex- common stock on a stock
change Commission re- exchange. Their prices
jected Friday a proposed change throughout the
Winklevoss exchange-trad- day as they are bought
ed fund that could have and sold. ETFs usually car-
opened the digital cur- ry lower fees than mutual
rency to larger numbers of fund shares.
ordinary investors. Many of the problems
The SEC said the proposal around bitcoin occur at
from Tyler and Cameron In this Thursday, Oct. 8, 2015, file photo, Tyler Winklevoss, left, and Cameron Winklevoss, founders places where people store
Winklevoss was inconsis- of Gemini Trust Co., appear on the “Countdown to the Closing Bell with Liz Claman” program, on their digital cash or ex-
tent with rules for securi- the Fox Business Network, in New York. change it for traditional
ties exchanges designed Associated Press currencies like dollars or
to prevent fraud and ma- coin fell 7.6 percent to prices. erly oversee trading in the euros. If an exchange has
nipulation, and to protect $1,101 on Friday following The 35-year-old identical- fund, the SEC said. sloppy security, or if some-
investors. news of the SEC’s rejec- twin entrepreneurs have Bitcoin still is in the early one’s electronic wallet is
Bitcoin, which is stored tion. Since 2013, its value been evangelists for bit- stages of its development, compromised, the money
in encrypted digital wal- has rocketed from $13 to a coin in recent years, insist- the SEC noted, adding can easily be stolen.
lets, allows people to buy peak of around $1,300. On ing it could even replace that, “Over time, regulated “Bitcoin still has a long way
goods and services and a given day, bitcoin can gold as a stable currency. bitcoin-related markets to go before it should be re-
exchange money with- fluctuate by 20 percent or They’ve promoted their of significant size may de- lied upon as a mainstream
out involving banks, credit more. It’s increased nearly company Gemini as a velop.” At that point, the means of transaction or
card issuers or other third 30 percent so far this year. stock market for bitcoin. agency would reconsider even for investment specu-
parties. About 8 years old, Currently the ways of buy- Last year, New York state its position. lation,” says Mark Williams,
it has yet to be broadly ing and investing in bitcoin approved regulations gov- “We remain optimistic and a former Federal Reserve
embraced and has been are fairly limited: on online erning a new exchange committed to bringing (a examiner who teaches fi-
prone to wild price swings. exchanges or through a operated by Gemini for bitcoin exchange-traded nance at Boston University.
The value of a single bit- In comments to the SEC on
trust that charges premium a virtual currency called fund) to market, and look
Ether. forward to continuing to the Winklevoss ETF propos-
In a 38-page order posted work with the SEC staff,” Ty- al, Williams wrote, “There
on its website, the SEC re- ler Winklevoss said. are several fundamental
jected the application Bitcoins are basically lines flaws that make bitcoin a
by the Winklevoss broth- of computer code that dangerous asset class to
ers and the BATS BZX Ex- are digitally signed each force into an ETF structure.”
change to list and trade time they travel from one Among them, he listed
Winklevoss Bitcoin Shares, owner to the next. It’s de- light trading volume, ex-
an exchange-traded fund signed for secure financial cessive hoarding, extreme
based on bitcoin. transactions that require price volatility, the difficulty
“The significant markets for no central authority — no of selling large blocks of
bitcoin are unregulated,” banks, no government bitcoin quickly, high risk of
the agency said in the or- regulators. bankruptcy and market
der. Because of that, the That makes it attractive to manipulation.
exchange wouldn’t be off-the-grid types such as There are two other similar
able to work with “signifi- libertarians, people who applications for bitcoin ex-
cant, regulated” markets want to evade tax authori- change trading before the
for trading bitcoin to prop- ties, and criminals, even SEC.q