The U.S. Securities and Exchange Commission (SEC) has once again delayed its decision on VanEck/Solid X backed exchange-traded fund (ETF).
The SEC has already received roughly 1,400 letters of comment regarding the Van Eck/Solid X Bitcoin ETF proposal. The Commission is seeking more input from the public, according to a September 20th filing from the SEC.
Despite the thousands of comments, the SEC feels it has not “[…] reached any conclusions with respect to any of the issues involved.”
The release outlines the Commission’s hopes of acquiring comments that answer. It reads:
What are commenters’ views of the Exchange’s assertions that bitcoin is arguably less susceptible to manipulation than other commodities that underlie ETPs; that the geographically diverse and continuous nature of bitcoin trading makes it difficult and prohibitively costly to manipulate the price of bitcoin; that trading on inside information regarding bitcoin is unlikely; that the fragmentation across bitcoin markets, the relatively slow speed of transactions, and the capital necessary to maintain a significant presence on each trading platform make manipulation of bitcoin prices through continuous trading activity unlikely; […]
Meanwhile, VanEck director Gabor Gurbacs also commented on the delay, emphasizing that he’s very impressed by the numerous positive comments received so far. Gurbacs tweeted:
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.
Prospective commenters have 21 days respond after the SEC’s order is registered, and those offering a rebuttal have 35.
One of the key lines of inquiry involves the degree to which Bitcoin 00 is manipulated in relation to other commodities, which are used to back ETFs.
Expect to Wait
The delay is not the first and, as Bitcoinist reported in late-August, the SEC has already shot down numerous ETF proposals, citing “market manipulation,” which legal expert Jake Chervinsky says is the “main concern.”
3.0/ Q: "Why hasn't the SEC approved a bitcoin ETF yet?"
The main concern is market manipulation. Exchange Act Section 6(b)(5) requires that an exchange's rules be designed to “prevent fraudulent and manipulative acts and practices” & “protect investors and the public interest.”
— Jake Chervinsky (@jchervinsky) September 20, 2018
However, the crypto community has something of an ally in SEC Commissioner Hester Peirce, affectionately called “Crypto Mom.” In early August, Peirce claimed that there is “no reason” to not let the Bitcoin ETF move forward.
The Van Eck/Solid X proposal was initially put forth earlier this summer. The next deadline for a decision is expected to be published in the Federal Register soon and solicit more comments from the public. Though, Chervinsky expects the SEC to postpone the decision up to the final deadline which is expected sometime in February/March 2019.
Should an ETF be approved, the fund would be listed on the Chicago Board of Exchange (CBOE).
You can submit your own comments to the SEC here.
What are your thoughts on the continuing ETF delays? Don’t hesitate to let us know in the comments below!