SEC Postpones Decision on VanEck Bitcoin ETF, Again
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aThe price of Bitcoin has plunged more than 9% in the last 24 hours following the announcement from the SEC that once again delays its decision on the rule change for a VanEck’s Bitcoin exchange-traded fund. The new deadline is February 27, 2019.
The Bitcoin ETF that was proposed by money manager VanEck and SoldiX in partnership with CBOE BZX exchange has been delayed for the third time by the SEC in Thursday’s circular. SEC stated:
“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,10 designates February 27, 2019, as the date by which the Commission shall either approve or disapprove the proposed rule change.”
Altcoins are following the Bitcoin’s crash path and are crumbling one by one, as XRP has declined by 10.71%, Ethereum [ETH] by 16.01%, Stellar Lumens by 16.32% and in an interesting turn of events, Bitcoin SV has overtaken Tether [USDT] and Bitcoin Cash [BCH] to take the rank five for itself.
Just hours earlier, Gabor Gurbacs — VanEck’s director of digital asset strategy — expressed confidence that SEC approval of the investment firm’s Bitcoin ETF application was around the corner. He gave three reasons as to why he believes Bitcoin (BTC) is “not uniquely susceptible to market manipulation”.
Gurbacs noted that there was increasing compliance with KYC/AML procedures, with prominent industry players implementing these protocols. The crypto industry is also moving towards a self-regulatory framework, with ten leading firms recently establishing the Association for Digital Asset Markets (ADAM) to create a Code of Conduct for markets. Finally, the CFTC of the USA has increased oversight, claiming that BTC is a commodity. However, after the announcement was made he called it “expected”:
SEC Shifting Goal Posts
Despite the growth in the Bitcoin derivatives market, the SEC has been moving targets for the approval of Bitcoin ETFs. Earlier the securities agency stated that commodity-trust exchange-traded products (ETPs) have been always approved, historically, in the context of “well-established, significant, regulated markets for futures.”
One of their latest memorandum counters this SEC argument saying that multiple Bitcoin derivative products like futures exist in the crypto market, regulated by the CFTC. Moreover, these products are launched by big players like CME and CBOE. In August 2018, SEC rejected a total of nine Bitcoin ETF proposals citing concerns of lack of regulations in a crypto derivatives market, of a “significant” size.
Last month, SolidX CEO Dan Gallancy reaffirmed his stand saying the latest delay in the decision has not caused any change in the outlook of the proposal. Eric Balchunas, a senior ETF analyst for Bloomberg Intelligence, told that the order looked “like more of the same in terms of seeking comment and asking questions regarding some of their major concerns.”
There are high-hopes pinned on the arrival of CBOE Bitcoin ETF. Not only crypto enthusiasts but big players from the global financial market are eagerly looking towards it. In August, the SEC, in one shot, rejected a total of nine Bitcoin ETFs from Direxion, GraniteShares and ProShares, saying that they were not competitive enough to handle market manipulation. The decision was later taken into reconsideration by SEC Commissioner Hester Peirce.
Approval Within the Next Few Months
There is the uncertainty within the SEC on how to regulate bitcoin ETFs. At least two of the five SEC commissioners are viewed as being supportive of a bitcoin ETF, although SEC Chairman and Commissioner Jay Clayton does not seem supportive.
In August, the American securities regulator simultaneously rejected nine separate bitcoin ETF proposals from ProShares, GraniteShares, and Direxion. Then, 24 hours later, the SEC stayed its own decision and announced it was re-reviewing the applications.
Jake Chervinsky, who is an American lawyer (an associate at the law firm of Kobre & Kim) commented: