SolidX has sued asset manager VanEck for Bitcoin ETF plagiarism in a lawsuit filed in a New York state court on Tuesday.
January 13, 2020 | AtoZ Markets – Over the past year, the craze for a Bitcoin Exchange Traded Fund (ETF) has dampened. The reason for this is because the US Securities and Exchange Commission (SEC) has always rejected all of the applications from several major firms.
Two of these applicants include SolidX Management, a blockchain startup and asset manager VanEck Securities Coporation.
SolidX Sues VanEck
Even though there’s no certainty whether or not the SEC would approve a Bitcoin ETF, SolidX is now pointing accusing fingers at VanEck for cutting ties with them after “surreptitiously” filing for a Bitcoin product that is supposedly based on SolidX’s work.
VanEck is facing a lawsuit from the blockchain firm over the Bitcoin ETF application which has been filed for SEC approval just two weeks prior to this.
While VanEck was the first company to file for a Bitcoin ETF back in 2017 under the Investment Company Act, SolidX had been working on an ETF product for Bitcoin since 2015.
Both based in Manhattan, SolidX and VanEckhad entered into partnership in 2018 with the idea of using SolidX’s experience with Cryptocurrencies and VanEck’s extensive background in issuing financial products to jointly strive towards launching a Bitcoin ETF.
According to the complaint, both firms filed the VanEck SolidX Bitcoin Trust application in 2019 after it managed to exploit a loophole in the SEC regulations and offer this product to institutional investors only. However, the application was withdrawn in September 2019, and the companies parted ways in August 2020.
SolidX’s recent complaint describes this as a “bad faith termination” of their agreement.
Is SolidX victim of VanEck’s foul play?
On the last day of 2020 VanEck had announced its latest application for a Bitcoin ETF. Now, SolidX’s lawsuit states that VanEck was “surreptitiously working on its own Bitcoin product even while telling the world that it was ‘married’ to SolidX.” The lawsuit adds:
“Using SolidX’s work and work product to compete with it is bad enough, but the registration statement VanEck filed would be called plagiarism in any other context: the structure of VanEck’s proposed Bitcoin ETF is substantively identical, or virtually so, to the structure for which SolidX sought SEC approval.”
The plaintiff further alleges:
“VanEck began announcing products that directly compete” within weeks after terminating their agreement, adding that VanEck “could not have begun to issue [said products] without working against SolidX’s interests while still its business partner.”
What is more, SolidX states that VanEck’s “marquee” brand and “credibility” as an ETF issuer have communicated its decision to partner with the firm. VanEck had “little if any, expertise in Bitcoin” and had hired SolidX for its expertise with cryptocurrencies.
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