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Regulation

SEC Publishes Memorandum for SolidX and VanEck BTC ETF Proposal

Redwan Eid | Oct. 24, 2018
SEC Publishes Memorandum for SolidX and VanEck BTC ETF Proposal

October- 24, 2018 | AtoZ Markets

The U.S. Securities and Exchange Commission (SEC) has issued a memorandum, against the background of the meeting it had with VanEck- a New York-based investment management firm with $46 billion in assets under management, and SolidX as a provider of blockchain software development and financial services.

The memorandum summarizes the applicants’ history with the regulatory body, where SolidX had filed for listing Bitcoin ETF on the New York Stock Exchange (NYSE) early in March 2016, however the application was not successful.

SEC Commissioner Elad L. Roisman and his counsels Dean Conway, Matthew Estabrook, and Christina Thomas had met with representatives of SolidX, VanEck, in addition to the Chicago Board Options Exchange (CBOE).

The media repots that VanEck joined SolidX in June 2018 to apply for listing a “physically-backed Bitcoin ETF” on CBOE’s BZX Equities Exchange, while the SEC’s decision is still pending since it was postponed in August. 

As reported, the suggested pricing of each share of the physically-backed Bitcoin ETF is about $200,000 (25 bitcoins per share), focusing on institutional, rather than retail investors, as analysts read.

Concerns over Failure to Meet Compliance Conditions and Ambiguity in the Decision

The regulatory body explains in the document the reason behind turning down SolidX’s previous ETF application in 2017 in saying: “a perceived failure to be consistent with Section 6(b)(5) of the Securities Exchange Act, which focuses on preventing fraudulent and manipulative acts and practices.

The SEC had rejected nine applications for listing and trading various Bitcoin ETFs from three different applicants, referring to similar concerns over the lack of regulated derivatives markets of a sufficiently “significant” size, as reported.

In their turns, VanEck, SolidX and CBOE’s representatives answered this point in their memorandum, saying: “As issuers, we are concerned the SEC staff have created a moving target in their use of the word ‘significant.’ The Staff have never provided guidance as to what "significant" means, enabling them to move the goal post indefinitely.”

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