Twins Trumped: Winklevoss’ Lose Bid for Bitcoin Trade Fund

The irrepressible Winklevoss twins, known for having sued Mark Zuckerberg over the idea for Facebook, have suffered a setback from federal regulators in their push to expand the use of bitcoin to a wider universe of investors.

The Securities and Exchange Commission rejected Friday a proposed Winklevoss exchange-traded fund that could have opened the digital currency to larger numbers of ordinary investors.

The SEC said the proposal from Tyler and Cameron Winklevoss was inconsistent with rules for securities exchanges designed to prevent fraud and manipulation, and to protect investors.

Bitcoin, which is stored in encrypted digital wallets, allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. About 8 years old, it has yet to be broadly embraced and has been prone to wild price swings.

The value of a single bitcoin fell 7.6 percent to $1,101 on Friday following news of the SEC's rejection. Since 2013, its value has rocketed from $13 to a peak of around $1,300. On a given day, bitcoin can fluctuate by 20 percent or more. It's increased nearly 30 percent so far this year.

Currently the ways of buying and investing in bitcoin are fairly limited: on online exchanges or through a trust that charges premium prices.

The 35-year-old identical-twin entrepreneurs have been evangelists for bitcoin in recent years, insisting it could even replace gold as a stable currency. They've promoted their company Gemini as a stock market for bitcoin. Last year, New York state approved regulations governing a new exchange operated by Gemini for a virtual currency called Ether.

In a 38-page order posted on its website, the SEC rejected the application by the Winklevoss brothers and the BATS BZX Exchange to list and trade Winklevoss Bitcoin Shares, an exchange-traded fund based on bitcoin.

"The significant markets for bitcoin are unregulated,"...

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