Earlier this month, the SEC started seeking comments from “interested persons” on a Bitcoin [BTC]-based exchange-traded fund. This comes after the news of a new proposal to ease ETF approvals.
The proposal is for the VanEck SolidX Bitcoin Trust, which is a Bitcoin-only fund. The partnership between VanEck, a New York-based money manager, and SolidX, a financial services company, occurred earlier this year in June.
While they have not been able to secure a license for ETFs while individually filing, the partnership aims to change this. VanEck is said to market the ETF, while SolidX acts as a sponsor for a Bitcoin ETF that will be “insured against loss or theft of bitcoin.”
Jan Van Eck, President of VanEck stated:
“We believe that collectively, we will build something that may be better than other constructs currently making their way through the regulatory process. A properly constructed, physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin.”
This news comes hot on the heels of the SEC asking for comments on the new ETF. Older applications have been turned down, with the authority quoting concerns regarding Bitcoin’s liquidity and volatility.
The SEC, however, recently announced that they propose to ease ETF approval rules, especially for low-risk ones. This would allow companies to issue “plain vanilla versions” of the ETF without seeking approval.
SEC Commissioner Kara Stein said:
“The rule would include many of the website disclosure requirements that are in existing orders such as disclosing the ETFs current net asset value per share, market price, and premium or discount – each as of the prior business day.”
The regulatory air around cryptocurrencies seems to be clearing, as institutional money seems more eager to move into the market. However, there is no doubt that the state of affairs will be determined by the SEC’s approach to it.
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