Cameron and Tyler Winklevoss are likely to submit a revised plan for their proposed bitcoin exchange-traded fund (ETF) to the US Securities and Exchange Commission (SEC) within the next two weeks, the brothers' lawyer Kathleen H. Moriarty told Bloomberg on 30th January.

The first proposal for Winklevoss Bitcoin Trust was filed last July. Since then Moriarty says she's been "in dialogue" with regulators about altering the plan.

The ETF has been styled as a way for the Winklevoss to convince more mainstream investors to enter the bitcoin market, without directly exposing their money to the sometimes volatile currency.

Moriarty is realistic about the proposal given the current regulatory challenges, even with the planned revisions. She told Bloomberg that she believes it is progressing nicely and could be approved by the end of 2014.

Notably, the comments corroborate an earlier January report by Seeking Alpha that suggested that the SEC had "been receptive" to the ETF and that its prospects "looked good".

Despite the legal challenges the Winklevosses face, SecondMarket has already succeeded at launching a bitcoin ETF known as the Bitcoin Investment Trust. One notable difference between the two funds, is that SecondMarket's offering is only open to high-income, institutional investors.

The original proposal for the Winklevoss ETF called for it to be traded publicly and open to general investors. Subsequent reports suggested that SecondMarket was able to bypass many regulatory hurdles by pursuing this demographic, and that even ETFs that deal in established commodities can face difficulties making it to a wider market.

Further, SecondMarket, in public comments, seemed to back this belief:

"From a risk-profile vantage point bitcoin is very risky and we think it’s not appropriate for retail investors," Mark Murphy, a spokesman for SecondMarket, told Quartz in September.

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The news comes two days after the Winklevoss brothers were part of the most anticipated panel of this week's New York Department of Financial Services (NYDFS) hearings.

At the event, Cameron Winklevoss appealed to regulators for a "middle ground", but cautioned that too much regulation would inhibit investors from entering the virtual currency space.

The comments were echoed by other major investors who suggested that, despite setbacks like the recent Charlie Shrem arrest and Silk Road shutdown, current regulation is working.

However, this viewpoint might not best serve the Winklevoss and their ETF.

The lack of regulation or guidance on virtual currencies could be a contributing factor to the SEC's reluctance to approve it.

Image credit: Pete Rizzo