Investment Management Firm VanEck Insists Proposed Bitcoin ETF is “Consistent” with SEC Regulations, May Be Approved Before September

Investment management firm VanEck is trying to launch a bitcoin ETF – they’re just waiting for approval from the Securities and Exchange Commission. The SEC continues to deliberate on the decision, although VanEck insists their bitcoin ETF is “consistent” with the law.

Meanwhile, public documents released by the SEC earlier today indicate that they could approve the VanEck bitcoin ETF as soon as August 2018.

In a letter dated July 20, VanEck reiterated its belief that the investment industry was ready and able to support a bitcoin ETF.

VanEck has proposed the launch of a bitcoin ETF in partnership with fellow operator SolidX.

In 2017, the SEC rejected a bitcoin ETF from both companies. As of January 2018, the SEC continued to insist that various questions needed to be answered “satisfactorily” before it would be appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products.”

Now, VanEck believes it has answered those questions, and the company clearly sees no reason to delay approval of its bitcoin ETF.

In the letter from July 20, VanEck addressed some of the issues raised by the SEC:

“In the Staff Letter, you raise a number of concerns for cryptocurrency and cryptocurrency-related investment funds concerning valuation, liquidity, custody, arbitrage, potential manipulation, and other risks.”

“We believe these concerns have appropriate answers […] moreover, by offering investors exposure to bitcoin through a regulated investment product, we believe the proposed ETF will be consistent with the Securities and Exchange Commission’s […] mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”

VanEck emphasizes the fact that bitcoin markets have sufficient liquidity and diversity to assuage SEC concerns. One of the SEC’s primary concerns with launching a bitcoin ETF is that it would expose ordinary investors to a market that’s rife with price manipulation and other tactics.

In fact, VanEck insists that an ETF “could reduce potential manipulation.”

Industry analysts have described the letter as VanEck “swinging back” at the SEC.

VanEck has swung back at the SEC, defending its ETF in a July 20 letter to the agency, showing the liquidity and diversity of bitcoin markets: pic.twitter.com/0KdOuGDtnl

— Frank Chaparro (@fintechfrank) July 24, 2018

Yesterday, Zero Hedge was reporting that the SEC was preparing to approve bitcoin ETFs by the end of the year. They cited one source claiming a decision could come as early as September 2018.

That source’s info appears to be partially vindicated today. Earlier today, CoinDesk reported that the SEC is delaying its decision to approve Direxion's bitcoin ETFs until September 2018. CoinDesk cited public documents revealed on Tuesday.

Those public documents were seen in the newest edition of the Federal Register, where the SEC explained it was delaying its decision on five different bitcoin ETFs until September 2018.

One of the bitcoin ETFs will match the price of bitcoin, while the other four are based on the price movements of bitcoin.

In the public documents, the SEC writes,

“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, … designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.”

Interestingly, in the documents, the SEC claims to have only received two comments on proposed ETFs – despite the fact that the SEC’s online comment form has received dozens of comments over the last few years. It’s possible that the SEC published the article before the number of comments surged last week.

The crypto community clearly wants a bitcoin ETF, but not everybody is joining the enthusiasm.

Atlantis Asset Management chief investment strategist Michael Cohn told CNBC today in an interview that SEC approval of a bitcoin ETF would be “insane”.

“Then they’re putting a rubber stamp on it as an asset, and I don’t think governments want to go there yet. It just seems as though it’s not something I’d want to put my clients into in any way, shape or form. You can only be embarrassed.”

The latest statement from the SEC seems to indicate all bitcoin ETF approvals will be delayed until September 2018. That’s not the case, however.

The SEC’s documents refer to five separate bitcoin ETFs, none of which are the proposed ETF from VanEck and SolidX.

In other words, this could indicate that the SEC plans to rule on the VanEck and SolidX ETF prior to September 2018. The ETF has been in the works since last year – and it could be the first ETF up for approval.

Stay tuned for more information as VanEck and SolidX seek approval for their bitcoin ETF.

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