[2018-09-21]US SEC Asks for Further Comment Regarding VanEck Bitcoin ETF

[forumevi]

The U.S. Securities and Exchange Commission (SEC) has requested further comments regarding its decision on the listing and trading of a Bitcoin (BTC) exchange-traded fund (ETF), according to an official notice released September 20.

The ETF under consideration is backed by investment firm VanEck and financial services company SolidX. Initially filed on June 6, the fund is claimed to be physically-backed, which means it will hold actual Bitcoins, and is expected to list on the Chicago Board of Exchange (CBOE) BZX Equities Exchange (BZX).

In the notice, the SEC notes that it has not “reached any conclusions with respect to any of the issues involved,” and is asking for additional comments from interested parties addressing the sufficiency of the BZX’s statement in support of the proposal.

In particular, the SEC is seeking comments on eighteen key issues, among which are commenters’ views on BZX’s assertions that BTC “is arguably less susceptible to manipulation than other commodities that underlie exchange-traded products (ETPs).” The note further reads:

“The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest’.”

On June 20, BZX filed a proposed rule change with the SEC to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust. Per the proposal, each share will represent a fractional undivided beneficial interest in the trust’s net assets, while SolidX Management LLC will sponsor the VanEck SolidX Bitcoin Trust.

In August, the SEC postponed its decision on the ETF rule change until September 30, stating that it had received more than 1,300 comments. According to the document released on August 7, within 45 days of filing a proposed rule change, or within 90 days should the Commission deem necessary, the Commission will approve, disapprove, or extend the period of consideration.

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[Samarkand]

...
among which are commenters’ views on BZX’s assertions that BTC “is arguably less susceptible to manipulation than other commodities that underlie exchange-traded products (ETPs).”
...

This statement will be very difficult to disprove. Let´s be realistic here, the Bitcoin trading market
is still heavily manipulated. Many of the high-volume exchanges are engaged in shady practices like
wash trading, trading against their own customers and similar stuff. As long as exchanges like
Bitfinex have that much influence on the BTC price it is hard to make the case that BTC is less
susceptible to manipulation compared to other commodities.

This is probably also the reason why they will reject this ETF application in the end - as most
of us already expected anyway.

[1Referee]

This is probably also the reason why they will reject this ETF application in the end - as most
of us already expected anyway.

It definitely contributues, but in the end, I strongly believe that even if you present the SEC a bullet proof ETF, they will still reject it because they might not want to contribute to even more power for Bitcoin. Don't forget that Bitcoin is a counter reflection of the regular economy; the more Bitcoin increases in value, the more the regular economy deflates.

In other words, I think there is much more that causes the SEC to reject these ETF's than just regulatory concerns. If you have the ability to allow Bitcoin to enter a trillion dollar market, or to prevent it from entering, you have to outweigh the pros and cons for yourself, and it's clear that there are only cons in this case. Bitcoin is rat poison as traditional gurus tend to refer to it, and I agree, it has the potential to undermine governments (the rats) with ease.

[Rahar02]

they will still reject it because they might not want to contribute to even more power for Bitcoin. Don't forget that Bitcoin is a counter reflection of the regular economy; the more Bitcoin increases in value, the more the regular economy deflates.

Totally agree, more likely it will get rejected again because of the market can easily be manipulated by big whales, can't deny it how easily to influence people to buy and sell bitcoin. People follow the profits. The SEC can say ETF proposals aren't adequate to prevent fraudulent and manipulative acts and practices, end of story.
If we think about it, bitcoin ETF has no chance to be approved as most of bitcoin trading volume occurs overseas, no one can guarantee price stability of bitcoin.
Moreover, bitcoin ETF will harm the price as bitcoin futures did to this market, instant pump and then fall to the ground, left many people in miserable debt.

[Kemarit]

It definitely contributues, but in the end, I strongly believe that even if you present the SEC a bullet proof ETF, they will still reject it because they might not want to contribute to even more power for Bitcoin.

Exactly, I really don't think that they will approved it even such strong cases has been presented to them.  So for me, its doesn't really matter if they extended it to next year, it will be likely rejected. I'm really getting tired of this play, and perhaps no one will care about their decision at the long run. Just look at the current price, seems that the market has been relieved from all this drama play, they responded with a nice price hike today.

[Slow death]

Well, one thing is for sure, with this news the crypto market breathed in relief, just look at the growth that the market had after this news to realize the relief that people had. If the SEC had rejected, we would have a bloodbath and it would not be small, maybe we would see bitcoin dropping to $5000. Fortunately, the SEC did what many people expected. if they are going to prove it next year or not? This is another story, for now we have to be happy because they did not give bad news

[cryptofonia]

...
among which are commenters’ views on BZX’s assertions that BTC “is arguably less susceptible to manipulation than other commodities that underlie exchange-traded products (ETPs).”
...

This statement will be very difficult to disprove. Let´s be realistic here, the Bitcoin trading market
is still heavily manipulated. Many of the high-volume exchanges are engaged in shady practices like
wash trading, trading against their own customers and similar stuff. As long as exchanges like
Bitfinex have that much influence on the BTC price it is hard to make the case that BTC is less
susceptible to manipulation compared to other commodities.

This is probably also the reason why they will reject this ETF application in the end - as most
of us already expected anyway.

Let´s be realistic here, the securities trading market
is heavily manipulated but this doesn't deter SEC from approving securities ETF.

[Samarkand]

Let´s be realistic here, the securities trading market
is heavily manipulated but this doesn't deter SEC from approving securities ETF.

I´d argue that the degree of manipulation in the cryptocurrency markets is even higher.
Obviously security trading is also subject to manipulation, just not to the same degree.
You don´t really believe that wash trading or spoofing are more rampant on a regulated exchange
from the US like CBOE compared to a bucket shop like BitMex that is run by a bunch
of greedy ex-bankers.

Besides, the jurisdiction of the exchanges makes a big difference. Big exchanges for security
trading reside directly in the US, which facilitates control & regulation. Meanwhile influential players
in the Bitcoin trading game like Bitfinex and BitMex are operating outside of the US.

[squatter]

Let´s be realistic here, the Bitcoin trading market
is still heavily manipulated. Many of the high-volume exchanges are engaged in shady practices like
wash trading, trading against their own customers and similar stuff. As long as exchanges like
Bitfinex have that much influence on the BTC price it is hard to make the case that BTC is less
susceptible to manipulation compared to other commodities.

This is probably also the reason why they will reject this ETF application in the end - as most
of us already expected anyway.

Indeed, and I don't see things fundamentally changing by February. I get the feeling they want to see the majority of trading volume on regulated exchanges, or perhaps regulated US exchanges.

It definitely contributues, but in the end, I strongly believe that even if you present the SEC a bullet proof ETF, they will still reject it because they might not want to contribute to even more power for Bitcoin. Don't forget that Bitcoin is a counter reflection of the regular economy; the more Bitcoin increases in value, the more the regular economy deflates.

The stock market and the bitcoin market are correlated over the long term. They've both been in raging bull markets since Bitcoin's inception. GDP as well. How is the regular economy deflating?

I don't think the SEC is necessarily against Bitcoin, either. It's not that black-and-white. I think they're much more worried about their own budget and mission than they are about promoting some government-wide conspiracy.

[aso118]

I wonder why the SEC is going through this farce again. They have made up their mind that Bitcoin's price is susceptible to market manipulation and have gone on to reject every ETF based on cryptocurrencies. They will do so again and can save a lot of people a lot of money, if they announce that their minds are closed to Bitcoin ETFs for now.

[Samarkand]

I wonder why the SEC is going through this farce again.
...

I´d suspect that there are at least two reasons:

1. They want to be able to eventually approve an ETF when
the market is more mature and cryptocurrency has become
an important part of the whole financial industry. It is obviously
in their interest if the US is part of a paradigm change if it is
too happen at all. Therefore they are going through this farce again,
because dismissing all future ETF applications would drive
the Bitcoin derivatives industry away from the US.

2. They are a government agency that has a budget
of hundreds of millions of $. They obviously have to do
something to justify that they receive that much of the
tax dollars of the US citizens. It is helpful if they can reject
a Bitcoin ETF from time to time, because they can simply
regurgitate the same arguments every single time
("too much volatility", "consumer protection", "the market
is manipulated", "shady exchanges"...).

[Easteregg69]

Free idiot stamps in this corner.

Give em a hint...


Check up on DogeX

You might end up "sausaged". (With a sausage in your hand).

[cryptofonia]

just a trick to avoid the regulation. The real reason why US power is reluctant in regulating crypto https://cryptofonia.pro/news/the-real-reason-why-us-power-is-reluctant-in-regulating-crypto/