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Winklevoss Bitcoin ETF Revisions Reflect Consumer Protection Concerns

Winklevoss Bitcoin ETF Revisions Reflect Consumer Protection Concerns

Winklevoss Bitcoin ETF Revisions Reflect Consumer Protection Concerns

Following discussions with regulators, Winklevoss Bitcoin Trust has submitted a revised SEC filing.

Following discussions with regulators, Winklevoss Bitcoin Trust has submitted a revised SEC filing.

Following discussions with regulators, Winklevoss Bitcoin Trust has submitted a revised SEC filing.

AccessTimeIconFeb 20, 2014, 11:03 PM
Updated Sep 3, 2021, 10:10 AM

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Cameron and Tyler Winklevoss submitted a revised filing with the US Securities and Exchange Commission (SEC) on 20th February for Winklevoss Bitcoin Trust, the long-awaited bitcoin exchange-traded fund (ETF) the investors first proposed in 2013.

The official submission, came just weeks after the Winklevosses revealed they were in dialogue with regulators about revising the proposal with the agency.

A filing for the Winklevoss Bitcoin Trust was first submitted in July 2013.

Perhaps, most notable of the changes was the inclusion of Winklevoss Index - or Winkdex for short - into the document.The new blended bitcoin price index from Winklevosses' Math-based Asset Index LLC will be used to determine the value of the bitcoins in the ETF.

Previously, the price was to be based on "a weighted average of the average of the high and low transaction prices" on three major exchanges, Mt. Gox, Bitstamp and BTC-e.

Released on 19th February, the tool is designed to reflect what the investors believe to be the "true price of bitcoins". Notably, the brothers' legal counsel Kathleen H. Moriarty said this inclusion was not part of any SEC discussions.

Additional changes provided insight into the investors' discussions with the SEC, as well as the potential concerns of which they feel its investors will need to be properly notified.

SEC concerns

Though much of the altered language related to the inclusion of the Winkdex as the indicator of pricing for the ETF, there were wording changes that suggested the SEC was not initially satisfied with the consumer warnings included in the original filing or that it felt the public might need to be better informed about potential risks.

For example, new passages detailed how the ETF would be affected by large-scale attacks to the blockchain, the volatility of new bitcoin exchanges and the regulatory actions by foreign nations that may lead to the "restriction of ownership, holding or trading in the Shares".

Read one new line:

"The temporary or permanent existence of forked Blockchains could adversely impact an investment in the Shares."

Next steps

In spite of the revisions, however, Moriarty suggested the ETF won't necessarily be available for the general public soon.

Moriarty explained the situation to CoinDesk:

"It's a back and forth between the issuer and the SEC ... It's very hard to predict when these things will come to bear. It drives issuers crazy that you can't predict it."

Moriarty further indicated that the SEC has asked her not to comment on a timeline for the ETF publically. As recently as January, Moriarty had been outspoken on the issue, suggesting the ETF could be approved as soon as the end of 2014.

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