LOS ANGELES—The Winklevoss twins of Facebook fame have become equally known for their interest in bitcoin, the digital currency that gained international attention following the Cyprus meltdown. Now they want to institutionalize their interest. The twins, Cameron and Tyler, “this week filed with the U.S. Securities and Exchange Commission to create the Winklevoss Bitcoin Trust, a variation of an exchange-traded fund (ETF) that would hold bitcoins and issue shares on a secondary exchange,” Bloomberg reported Tuesday.
The trust is designed to be a different animal, “the first product in the $2 trillion ETF industry to track a virtual asset, rather than securities such as stocks and bonds or commodities such as gold and oil. The biggest hurdle for the 31-year-old brothers is persuading the SEC, which has moved haltingly when approving funds that break new ground, to give their product the green light.”
The process to get approval for an initial public offering could take years, however. Reginald Browne, head of exchange-traded product trading at Knight Capital Group Inc. (KCG), the largest lead market maker for ETFs and their cousins ETPs on the New York Stock Exchange, told Bloomberg, “I like new, creative ideas but I would need a lot more information to figure out the investor metrics of that proposal.”
According to Bloomberg, the SEC regularly moves at “a deliberate pace in approving products that may be complex or unique in their approach,” which is probably a good thing for many bitcoin acolytes who imbue the currency with the more political ambition to keep it free from regulation. The filing of an official application to operate the Winklevoss Bitcoin Trust with Wall Street’s blessing will not necessarily lengthen the approval process, but it certainly started one.
Photo: Tyler, right, and Cameron Winklevoss.