The US Securities and Exchange Commission has eviscerated the first generation of proposed bitcoin-based exchange-traded funds.

The Commission dismissed the Winklevoss Bitcoin Trust ETF in late July and rejected the filings made by the New York Stock Exchange and Cboe Global Markets last week after deeming their similar approaches to detect fraudulent behavior were not up to snuff.

In each rules filing, each exchange stated that it would rely on their internal rules as well as share information with the exchanges that operated the bitcoin futures markets, the CME and the Cboe Futures Exchange.

The Commission did not believe the relatively small size of the US bitcoin futures markets compared to the size of the global bitcoin spot market could detect market manipulation reliably.

The SEC has not rejected all of the proposed bitcoin-based ETFs. It did delay its decision on the Cboe’s VanEck family of ETFs until the end of September. However, since the filing uses almost the same boilerplate text for the market-surveillance description, the question remains why the regulator did not include it with the other rejections.

The ETF sponsors can wait for the US bitcoin futures markets to grow large enough that it would change the SEC’s mind or they could reach speak to financial regulators of Sweden and Gibraltar to find out how they integrated the unregulated bitcoin spot market with their highly regulated derivatives markets.

While the SEC continues its holding actions against cryptocurrency-based ETFs, Swedish regulators approved the listing of a bitcoin-based open-ended exchange-traded note on the Nasdaq Nordic exchange in May 2015. A year later, the Gibraltar Financial Services Commission followed suit and approved the listing of a bitcoin-based exchange-trade instrument, which is listed on the Gibraltar Stock Exchange as well as Deutsche Börse.

Regulatory regimes seldom transplant well from one jurisdiction to another, but the added insights could help ETF sponsors better craft the second generation of bitcoin ETF filings.