The price of bitcoin dropped Wednesday after the U.S. Securities and Exchange rejected a record nine applications for bitcoin exchange-traded funds.

The decision affected applications for two bitcoin ETFs filed by ProShares, one from GraniteShares and five ETFs from Direxion.

Reflecting the same concerns it previously raised when rejecting ETF applications from SolidX Bitcoin ETF, the Winklevoss Bitcoin Trust ETF and the Grayscale Bitcoin Investment Trust, the SEC once again stated in each rejection that it was concerned about fraud and manipulation of bitcoin markets given their unregulated nature.

In its rejection letter to Graniteshares, which was nearly identical in its wording to the other rejection letters, the SEC said that “the Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

The exchange, in this case, is the Cboe BZX Exchange where Graniteshares and ProShares were seeking to list its ETFs, while Direxion was seeking to list its ETFs on NYSE Arca.

On its fraud concerns, the SEC wrote that “among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’ That failure is critical because, as explained below, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary.”

The decision does not bode well for an application by Cboe (the exchange) to list its own bitcoin ETF that the SEC decided to delay ruling on until Sept. 30.

The price of bitcoin has been acting strangely this month, with upswings and downswings. But on Wednesday, its price dropped as soon as the announcement was made, going from a 24-hour high of $6,809.13 to $6,426.55 as of 10:35 p.m. EDT.

Image: investmentzen/Flickr