U.S. SEC defers its decision on VanEck SolidX Bitcoin ETF to December 2018
The U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has begun a formal review process of the proposal submitted by Cboe Bitcoin ETF to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust and it will need more time to come to a decision regarding the proposal.
According to the order dated September 20, the regulatory authority will now consider whether, pursuant to federal securities guidelines, it should approve the fund — the VanEck Solidx Bitcoin Trust — for listing on CBOE BZX Exchange.
The order states:
“The Commission is instituting proceedings pursuant to Section 19(b) (2) (B) of the Act 29 to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved.”
Final verdict on the Bitcoin ETF might get deferred to February 2019
The SEC said that on 20 June 2018, Cboe BZX Exchange (BZX) had filed with the SEC “a proposed rule change to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust”, which got published in the Federal Register on 2 July 2018.
According to the Section 19(b) (2) (B) of the Exchange Act, the new deadline is 180 days after the date of publication of the proposal, which adds up to 29 December 2018.
The order goes on to add:
The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6 (b) (5) of the Act, 28 which requires, among other things, that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,” and “to protect investors and the public interest.”
According to the proposal put forward by the exchange, the fund would also “maintain comprehensive insurance underwritten by various insurance carriers” to “protect investors against loss or theft of the Trust’s bitcoin.”
Mentioning the details of the proposal, the order notes:
“According to the Exchange, the insurance policy will carry initial limits of $25 million in primary coverage and $100 million in excess coverage, with the ability to increase coverage depending on the value of the bitcoins held by the Trust.”
Despite all the positive signs, it remains to be seen whether the SEC will rule in favor of the ETF. The Commission has till now struck down every bitcoin ETF proposal on which it has ruled. SEC’s ruling against the Winklevoss-led ETF in July raised few eyebrows, with SEC Commissioner Hester Peirce calling out for regulators to be more open to cryptocurrency products.
Pierce had openly shown her displeasure over the rejection of the Winklevoss Bitcoin proposal in July. She wrote:
“I respectfully dissent from the Commission’s order disapproving a proposed rule change, as amended, to list and trade shares of the Winklevoss Bitcoin Trust on Bats BZX Exchange, Inc.”
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