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SEC Delays On VanEck SolidX Bitcoin Trust

SEC Delays On VanEck SolidX Bitcoin Trust

The Securities and Exchange Commission said Tuesday it's delaying a decision on the proposed VanEck SolidX Bitcoin Trust by more than a month. The SEC said Sept. 30 will be the date the commission either approves or disapproves the fund.

What Happened

Exchange traded funds issuer VanEck and fintech company SolidX revealed plans for the VanEck SolidX Bitcoin Trust in June. Assuming the fund is approved, SolidX would be the sponsor while VanEck would market the fund.

The VanEck SolidX Bitcoin Trust is designed to allay some of the SEC's concerns regarding bitcoin ETFs, including potential cyber theft of the underlying assets. Additionally, if the VanEck SolidX Bitcoin Trust does come to life, it would likely debut with a $200,000 share price, underscoring a focus on institutional investors.

If the VanEck SolidX Bitcoin Trust is approved, it would trade on the CBOE under the ticker “XBTC.”

Why It's Important

Late last month, the SEC again rejected plans for the Winklevoss Bitcoin Trust, an ongoing bitcoin ETF by Cameron and Tyler Winklevoss, founders of the Gemini digital currency exchange. At the time of that rejection, the SEC reiterated concerns linked to fraud and cryptocurrency market manipulation.

A recent letter from VanEck to the SEC sought to address some of the commission's concerns about bitcoin ETFs.

“Given the proposed ETF’s regulation under the Securities Act of 1933 and 1940 Act and the fact that it offers exposure via regulated and surveilled bitcoin futures, we reasonably expect the proposed ETF to reduce potential manipulation and operational risk associated with a bitcoin investment product,” said VanEck in the letter.

What's Next

As for what's next, likely more speculation about the fate of bitcoin ETFs leading up to Sept. 30. September is a potentially busy month on the bitcoin ETF approval/disapproval front because the SEC is also expected to rule on several bitcoin ETFs from Direxion, including some leveraged products.

Regarding the Direxion plans, the SEC “finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change,” according to the SEC. “Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,\10\ designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change (File No. SR-NYSEArca-2018-02).”

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