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Why SEC Postpones Its Decision On VanEck-SolidX Bitcoin ETF?

The United States Securities and Exchange Commission (SEC) is unable to take a decision on the planned bitcoin ETF by VanEck-SolidX. This is despite receiving several comments about the planned instrument and changes in rules. As a result, the regulator has pushed for a final decision to September 30, i.e., whether to approve or not the ETF, which is the first of its kind in the country. This would mean depressing sentiments to the cryptocurrency sector at least in the near-term.

More Time to Deliberate

In its order, the SEC said that Cboe BZX Exchange had filed a proposed rule change to list, as well as, trade shares of SolidX bitcoin shares on June 20 last. Such shares would be issued by the VanEck SolidX Bitcoin Trust as per the rule 14.11(e)4 in respect of commodity-based Trust shares. On July 3, the proposed change of rule was published in the Federal Register and sought comments. The regulator has received over 1,300 comments on the planned change of rule since then and until August 6.

The SEC pointed out that there is a provision for 45 days to take a decision as per Section 19(b)(2) of the Act. Alternatively, there is a maximum period of 90 days if the regulator deems it necessary to take a decision on the proposed rule changes or decide whether the planned change of rule should be disapproved. Therefore, the commission indicated that it was left with no alternative but to extend this 45-day period. In a nutshell, the SEC seeks more time to discuss the ETF.

The latest move might not be surprising considering that the regulator has resorted to similar tactics in the past too using its statutory powers to postpone its decision on bitcoin ETF. The agency thinks that the proposed change of rule by CBOE would be a critical point that will come in the way of listing the planned ETC in concurrence with VanEck, as well as, SolidX crypto startup.

In its order, the SEC said, “Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SRCboeBZX-2018-040).” The decision is a key factor to encourage others to come out with a similar kind of ETF.

Dissent Voice

Significantly, the decision comes following the completion of a review by the Commissioners on proposed bitcoin ETF by Tyler Winklevoss and Cameron. Their effort was thwarted by a majority of the commissioners supporting the original rejection made in March 2017. Hester Peirce, a commissioner, has dissented from the decision terming it as a disservice to innovators and investors, coindesk reported.

Bitcoin price surged in the second half of July with the hope of a favorable decision on approving ETF. However, the regulator has postponed its decision to August leading to a drop in price. The latest decision will further depress the sentiments among the supporters of cryptocurrencies, particularly bitcoin.

About the author

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Erica Buist

Writer and freelance journalist, currently writing a book about death festivals for Unbound/ Penguin: unbound.com/books/deathtivals

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