Saturday, 30 June 2018

SEC Seeks Comment On a Bitcoin ETF Proposed by CBOE

According to the latest reports coming this Tuesday, the U.S Securities and Exchange Commission (SEC) has sought for comments on a proposal put forward by the Chicago Board Options Exchange (CBOE) to list and trade the SolidX Bitcoin Shares. The document notes that these shares are nothing but Bitcoin-based exchange-traded-funds (ETFs) that have been proposed by the VanEck SolidX Bitcoin Trust.
The document further notes that the trust will be holding Bitcoin only and all Assets will consist of bitcoin held by the Trust utilizing a secure process.” The CBOE documents also mentions the trust to invest only in Bitcoin and the shares of the vehicle will further reflect in the price of Bitcoin. The document mentions that the operators will buy/sell Bitcoin as and when required and that  "the Trust is not actively managed.”
The SEC has sought an reply from the “interested parties” on the proposed rule change. The proposal of the Bitcoin ETF came to life after VanEck formed a partnership with blockchain startup SolidX. This is probably the third attempt from VanEck to formulate a Bitcoin investment vehicle.
Despite Bitcoin undergoing several regulatory hurdles in the past, VanEck CEO Jan van Eck said he believes that the cryptocurrency is "a legitimate investment option, as a type of 'digital gold' that may make sense for investors' portfolios.”
He further adds that "We believe that collectively we will build something that may be better than other constructs currently making their way through the regulatory process. A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin.”
This is not for the first time that the SEC is dealing with such Bitcoin ETF proposals. The SEC has previously forced several other companies to withdraw Bitcoin ETFs citing different issues of security or unpreparedness of the companies to deal with such investment vehicles.
The SEC has several times mentioned that it is difficult for cryptocurrencies to enter in the mainstream financial vehicles due to its nature of extreme volatility and liquidity.

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