Facebook is a brilliant idea. Whose brainchild was it? Most of us will say Mark Zuckerberg. A few, especially since the 2010 film, “The Social Network” will tell you it’s the Winklevoss Brothers.
The twin brothers, Cameron and Tyler Winklevoss, launched their social networking website ConnectU in 2004. In the same year, they sued Facebook CEO and founder, Mark Zuckerberg for allegedly taking their ConnectU idea and turning it into Facebook.
Math-Based Asset Services LLC
Four years ago (2013), the brothers became interested in bitcoin. Their company, Math-Based Asset Services LLC, applied with the SEC (Securities and Exchanges Commission) for a bitcoin-based ETF (exchange-traded fund) which they called Winklevoss Bitcoin Trust.
An ETF is a marketable security. It has an index, along with bonds, a commodity, or a basket of assets. It differs from a mutual fund in that it trades in the same manner as stock on a stock exchange.
If the Winklevoss brothers succeeded in getting approved by the SEC, their ETF was set to be the first cryptocurrency exchange-traded fund. For over three years, the two have struggled to convince the Securities and Exchanges Commission to approve their bitcoin ETF.
SEC made its decision on 10th March 2017. Surprisingly, it rejected their bid, thus crushing their hope of introducing the first crypto ETF.
In fact, it was not just Cameron and Tyler waiting with bated breath for the SEC’s decision. The immediate response to the verdict was a drastic loss in trading percentage for the cryptocurrency company. As I write this, it is a day later (March 11th), and the company has recovered.
But before the decision, Bitcoin prices had risen.
What this decision means is that investors will have to wait a bit longer to see the dream of a cryptocurrency ETF come to fruition.
One of the factors that work against Bitcoin is the lack of regulation. In fact, this factored highly in the SEC’s decision. Certain significant bitcoin markets, they pointed out, are unregulated.
Without regulation, it was difficult for them to reach security surveillance sharing agreements that would deal with their fears about bitcoin’s potential to be used for fraud and other manipulative practices.
Promisingly, the SEC has not completely shut the door on the possibility of a bitcoin ETF in the future. They acknowledged that it was only a matter of time before the development of regulated bitcoin markets that were big enough to pay attention to.
Perhaps it doesn’t help that the identity of Bitcoin’s founder Satoshi Nakamoto is as yet unknown. The entire matter is shrouded in deep mystery. No one knows who Nakamoto is, whether he is a real person, or if he is a group of individuals, or if he is even Japanese.
While mystery might work for artists and people in positions that don’t involve heavy responsibility, commandeering a global finance company is another cup of tea.
Should the company fail, or lose its investors’ money, who is to blame? If the identity of the man in charge is unclear, who will take responsibility? And what happens when organized crime rears its ugly head in the world of cryptocurrencies? Many people believe that regulation can’t come too soon. In the end, however, transparency should begin from the top. This is why OneCoin, a major cryptocurrency company in the global arena, is dedicated to transparency and accountability, with its CEO Dr. Ruja Ignatova leading by example.
Consequently, OneCoin is significantly less vulnerable than BitCoin because of this commitment to transparency.