The U.S. Securities and Exchange Commission has once again delayed its decision on the VanEck and Solid X backed exchange-traded fund, looking to invite more feedback, the agency said in a September 20, 2018, filing.
It seems that the wait for an exchange-traded fund that invests in Bitcoin is nowhere near finished, as the SEC seeks additional comments on a listing request.
In the filing, the Securities and Exchange Commission invited more feedback, despite already receiving more than 1,400 comment letters on a proposal to list an ETF from Van Eck Securities Corp.
According to the filing, those who wish to comment have 21 days after the SEC’s order is published in the Federal Register, while rebuttals have 35 days from that date. While a spokesperson for the SEC didn’t immediately reply to a request for comment from Bloomberg, some of the details of the views it was seeking were available in the filing.
Bloomberg reported that the SEC was seeking the public’s views on market manipulation, including whether Bitcoin is less susceptible to manipulation than other commodities that back exchange-traded products, and the need for more surveillance in the industry.
VanEck director Gabor Gurbacs also commented on the delay on Twitter, saying that he was very impressed by the numerous positive comments received so far.
I am humbled and impressed by the public support of the VanEck-SolidX initiative to bring to market a well-constructed, liquid, physical, insured Bitcoin ETF. 🙏1400+ comments, 99%+ in favor. The public has spoken! Bitcoin is compatible with the U.S. and global capital markets. pic.twitter.com/Ufuq0swwYT
— Gabor Gurbacs (@gaborgurbacs) September 20, 2018
This delay isn’t the first time ETFs have been shut down. After eight months of review, the SEC rejected the NYSE Arca’s application for two Bitcoin ETFs and the Cboe BZX exchange’s application for a similar financial tool on August 22, 2018, further clouding the pioneer cryptocurrency’s future listing on major stock exchanges.
Prevention of Fraud
In both of the ETFs page orders, the SEC cited the high probability of “market manipulation” as the main reasons the applications were rejected.
According to Jake Chervinsky, a legal expert in the field of cryptocurrencies, the SEC’s Exchange Act Section requires that an exchange’s rules be designed to prevent fraudulent practices and protect investors, as well as the public interest. The SEC claims that none of the proposed ETFs fulfilled the commission’s requirements.
However, the future of ETFs probably won’t be as bleak as the SEC makes it. The crypto community has something of an ally in SEC Commissioner Hester Peirce, who claimed that there is “no reason” to not let the Bitcoin ETF move forward.
In an August 1 interview with CNBC’s Cryptotrader, Pierce expressed her dissent to the SEC’s rejection of the Winklevoss Bitcoin ETF, saying the decision “undermines investor protection.” According to Pierce, greenlighting a Bitcoin ETF would “increase opportunities for investors, which this last decision did not do.”