[Breaking]: SEC Delays VanEck SolidX Bitcoin ETF Proposal, Reviewing Comments and February 2019 Ruling
The SEC delivered breaking news to the crypto community this afternoon when it announced the postponement of a decision on the bitcoin ETF proposed by VanEck and SolidX.
The VanEck SolidX Bitcoin Trust ETF is regarded as one of the best bitcoin ETF proposals making its way through regulatory hurdles. The SEC initially postponed a decision on the bitcoin ETF earlier this summer. They had until September 30 to approve, deny, or postpone the decision on the ETF once again. The SEC chose the latter option.
The SEC’s final decision on the proposed bitcoin ETF now must be delivered by February 2019.
You can view the 19-page statement announcing the postponement here on SEC.gov. It was released on September 20, 2018.
“On June 20, 2018, Cboe BZX Exchange, Inc…filed with the Securities and Exchange Commission…a proposed rule change to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust….On August 7, 2018…the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.”
The SEC goes on to explain the reason behind their latest decision to delay the decision on the ETF:
“As of September 19, 2018, the Commission has received more than 1,400 comment letters on the proposed rule change.”
The SEC notice then explains various features of the proposed ETF, including how it would work, where its shares would be listed, and how the bitcoins would be held within the fund.
The VanEck SolidX Bitcoin Trust ETF is The Most Promising ETF in the Space
The VanEck SolidX Bitcoin Trust ETF is seen as the most promising bitcoin ETF in the industry because of the unique way it handles funds. The ETF prices its shares at around $200,000 – or the equivalent of 25 BTC. When someone buys a share of the ETF, the fund purchases 25 real bitcoins, then stores them within the fund. The $200,000 price tag per share is expected to attract exclusively institutional investors and accredited investors, something that’s been described as a “genius” move as the ETF seeks to become the world’s first bitcoin ETF.
The SEC has rejected every bitcoin ETF proposal to date for a simple reason: because they believe bitcoin markets are manipulated and that the proposed ETFs do not have sufficient protections for investors.
Other bitcoin ETFs, however, haven’t proposed holding physical bitcoin: many of the ETFs rejected by the SEC have proposed holding bitcoin futures contracts. This is one of several key distinctions with the VanEck SolidX Bitcoin Trust ETF – and it’s a distinction that could be the difference between SEC approval or denial.
The SEC is Asking for Comments on Specific Subjects
What’s the next step for the VanEck SolidX Bitcoin Trust ETF? The SEC is now requesting comments on specific subjects. Comments will “address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice.” The document highlights 18 different areas of the ETF.
Here’s what SEC secretary Brent Fields wrote in the document asking for comments:
“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. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.”
To date, more than 1400 comments have been submitted on the VanEck SolidX Bitcoin Trust ETF, with many of those comments being strongly in favor of approving the ETF.
We also know that the SEC has at least one bitcoin ETF supporter among its commissioners: Hester Peirce, who famously dissented from her colleagues earlier this summer after the SEC denied the bitcoin ETF proposal from the Winklevoss twins.
Over the coming months, the SEC will accept and review comments on the proposed rule changes that would allow the listing of the VanEck SolidX Bitcoin Trust ETF.
Expect a Decision on the VanEck SolidX Bitcoin Trust ETF by February 2019
Meanwhile, the decision on the bitcoin ETF will be delayed until February 2019.
This seemed to be the most likely outcome, and many analysts agreed that bitcoin ETF approval was unlikely before the September 30, 2018 deadline. Many in the industry – including our own team at Bitcoin Exchange Guide – believed that the SEC would delay the decision on the ETF until February 2019.
This is where things get interesting: the SEC can no longer delay the decision on the bitcoin ETF. The SEC needs to approve or deny the VanEck SolidX Bitcoin Trust ETF by February 2019. The SEC can no longer postpone the decision on the ETF.
By February 2019 or earlier, we’ll know if the most promising bitcoin ETF has a future on the market – or if the VanEck SolidX Bitcoin Trust ETF will join the pile of 15+ other bitcoin ETFs denied by the SEC over the last few years.
VanEck SolidX Bitcoin Trust… by on Scribd