The United States Securities and Exchange Commission (SEC) has rejected the Winklevosses’ latest attempt to list a bitcoin ETF. After having a proposal rejected last year, the Gemini exchange founders had hoped to secure their Winklevoss Bitcoin Trust on BATS Global Market’s BZX stock exchange with this latest attempt.

But BZX’s June filing was curbed in a 3-1 vote this Thursday, July 26, 2018. In filing for the ETF, BZX proposed a rule change with hopes that the new proposal would be accepted. The SEC, though, found that neither the filing nor its related rules change met the requirements of the Exchange Act and the commission’s existing guidelines:

“BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices,” a document outlining the SEC’s rationale reads.

According to the SEC’s document,  BZX argues in its most recent proposal that the “geographically diverse and continuous nature of bitcoin trading makes it difficult and prohibitively costly to manipulate the price of bitcoin,” rendering it “generally … less susceptible to manipulation than the equity, fixed-income and commodity futures markets.”

The exchange further claims that “novel systems intrinsic to this new market provide unique additional protections that are unavailable in traditional commodity markets” and that its original proposal contained “traditional means of identifying and deterring fraud and manipulation.”

Ironically, the global nature of bitcoin’s unregulated market heavily influenced the SEC’s decision. The commission argues that the vast majority of bitcoin trading occurs outside of the United States’ regulatory purview. Given the vast, international scale of the market, there’s no way to guarantee investor protections against fraud and manipulation, the SEC claims.

In order to alleviate these concerns, BZX would need to “enter into surveillance-sharing agreements with, or hold Intermarket Surveillance Group membership in common with, at least one significant, regulated market relating to bitcoin” as“[s]uch agreements provide a necessary deterrent to manipulation because they facilitate the availability of information needed to fully investigate a manipulation if it were to occur.”

A surveillance-sharing agreement may have helped the Winklevosses’ odds, but since BZX “has not established that it has entered into, or currently could enter into, a surveillance-sharing agreement with a regulated market of significant size related to bitcoin,” the exchange cannot support its claims that it has sufficient measures in place to police manipulation.

The SEC goes on to stress that, while it finds BZX’s proposal doesn’t stack up with current legislation, “its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.” This qualifier could indicate that the SEC may be receptive to a future bitcoin ETF if the right conditions are met and its host exchange can provide proof of sufficient market protections.

Winklevoss Bitcoin Trust aside, several additional proposals are waiting on the SEC’s review. VanEck and SolidX, the former of which has filed for ETFs in the past, teamed up for a fresh filing that was made public earlier this month. Direxion Asset Management has also put forth proposals for five separate ETFs, but the SEC has decided to postpone its decision on these filings until September 21, 2018. Bitwise Asset Management has submitted its own ETF filing for approval this year, as well.