VanEck tried twice before: SEC postpones decision on its third bitcoin ETF

abdelaziz Fathi

The US Securities and Exchange Commission (SEC) has rescheduled its decision on whether to approve a Bitcoin exchange-traded fund proposed by investment giant VanEck.

The regulator pushed the deadline to make a decision on the proposed ETF by another 45-day period, until October 11. A decision was expected no earlier than August 27, nearly two months from the time the New York-based asset management firm submitted its application for the fund.

VanEck, which has over $80 billion in assets under management, seems quite determined to introduce a spot Bitcoin exchange-traded fund (ETF). Despite the previous rejections, the company filed a third application with the SEC while many proposals were getting rejected.

The move also came just eight months after the SEC rejected VanEck’s proposed bitcoin exchange-traded fund that would have directly tracked the underlying cryptocurrency’s price moves. Citing fraud concerns, which was in line with previous rejections of proposed ETFs, the SEC said the firm couldn’t demonstrate it would be able to prevent fraudulent trading to protect investors.

At the time, however, the US asset manager launched the third-ever US Bitcoin futures exchange-traded fund in November. The SEC has only approved futures-based Bitcoin ETFs, rejecting all spot market Bitcoin applications to cross its desk.

VanEck has filed with the US top watchdog for a regulated ETF tracking an index that draws data from five crypto exchanges. The recent Bitcoin ETF filing stressed that the index aims to capture the total returns available to investors in the world’s largest crypto asset. The new ETF differs from previously-filed similar proposals in that it falls under the stricter 1940 law governing mutual funds.

In 2019, VanEck also withdrew an application to list a bitcoin derivatives ETF after the SEC said it wouldn’t review a petition for a fund that intends to invest in virtual assets that aren’t yet available. In addition, the agency refused to grant an exemption that would have let VanEck’s fund become the first bitcoin-based ETF to launch on the New York Stock Exchange (NYSE).

The SEC repeatedly delayed deciding on the ETF applications, first extending the time it had to act on the proposal, then instituting formal proceedings to determine approval, and ultimately rejects the offer. Despite investor interest, it seems unlikely that the SEC would be comfortable using bitcoin as an underlying asset in a spot regulated investment vehicle any time soon.

 

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