VanEck, Cboe and SolidX Make Case for Bitcoin ETF in Meeting With U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commissioner Elad Roisman, who took office in September, met with representatives from VanEck, the Chicago Board Options Exchange (Cboe) and SolidX to discuss their Bitcoin exchange-traded fund (ETF) proposal which is currently pending.
Representatives Dan Gallancy and Dimitri Nemirovsky from SolidX, Laura Morrison and Kyle Murray from Cboe and Adam Phillips from VanEck met on October 9th to discuss a rule change proposal in connection with their joint efforts to launch a Bitcoin ETF.
The presentation defined the following key points and factors:
- Cboe BZX is the listing exchange
- Share price will be – $200,000 (25 bitcoin per share)
- Trust will be insured against loss or theft of bitcoin
Fintech startup SolidX began working on a Bitcoin ETF in 2015, partnering with New York-based investment management firm VanEck in 2017.
Since the SEC’s rejection of the proposed SolidFX Bitcoin ETF on March 28, 2017, multiple CFTC regulated derivatives markets now exist for Bitcoin, as noted in the presentation.
Despite the growing derivatives market, allegations of market manipulation and unethical trading practices have caused the SEC to proceed with caution and to issue delayed decisions and/or outright rejections of every Bitcoin ETF proposal to date.
Writing in September, the SEC said it needed time for more analysis to ensure that “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.’”
The industry reps in attendance at the meeting with Commissioner Elad Roisman targeted the agency’s valid concerns and discussed how they could be mitigated.
According to the presentation, Cboe rules are designed to:
- Prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade
- Foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities
- Remove impediments to and perfect the mechanism of a free and open market and a national market system
- Cboe’s initial and continued listing standards, and obligations on registered market makers in the shares, are intended to deter market manipulation and other misconduct
In September, in the run-up to its initial deadline on the ETF, the SEC solicited the public for more input on the proposal, asking respondents to weigh in on Bitcoin’s susceptibility to market manipulation. The feedback is currently under review and can continue for several months. Under the existing regulations, the SEC can delay through February 2019, at which time it has to either accept or reject the proposal.
Also in September, the SEC filed amendments to the proposed rule changes for several other Bitcoin ETFs, affecting nine proposals from GraniteShares, Direxion and ProShares.