The Securities and Exchange Commission (SEC) [official website] on Friday announced its decision to reject an application [text] to create an exchange-traded fund (ETF) [investopedia backgrounder] tied to the value of Bitcoin [website], a virtually currency. The fund, proposed by Tyler and Cameron Winklevoss [Winklevoss capital], would have tracked an index of assets, but would have traded like a stock. The markets where Bitcoin is currently traded are largely unregulated, prompting the SEC to deny a Bitcoin ETF due to “concerns about the potential for fraudulent or manipulative acts and practices in this market.” The Winklevoss brothers have vowed to obtain SEC regulation for Bitcoin.

The creation and use of digital currencies have been a contentious issue across the globe. The digital currencies can be transferred anonymously, unlike most hard currencies created by governments. In December 2016, a federal judge ruled [JURIST report] that the Internal Revenue Service (IRS) can serve a “John Doe” summons to digital-currency-services company Coinbase seeking detailed information on their customers’ 2013-2015 transactions. The summons will allow the IRS to have access to the names of all taxpayers in a particular category. In October 2015 the Court of Justice of the European Union ruled [JURIST report] that converting cash into Bitcoin should be exempt from value added tax within the 28-country bloc. In April 2014 then-US Attorney General Eric Holder expressed concern [JURIST report] before the US House of Representatives Judiciary Committee with respect to the proliferation of virtual currencies, which, he asserts, have created new avenues for money laundering, drug trafficking and other illegal activity.