EMERGING TECH
EMERGING TECH
EMERGING TECH
Bitcoin ETF applications withdrawn following SEC advice
Attempts to bring bitcoin exchange-traded funds to market have taken a blow as several companies withdrew their applications following feedback from the Securities and Exchange Commission.
Companies that have withdrawn their applications include Direxion Shares ETF Trust, Exchange Listed Funds Trust and ProShares Trust, with all three citing discussions with the SEC as spurring their decisions.
“On a call with [SEC] Staff on Jan 5, 2018, the staff expressed concerns regarding the liquidity and valuation of the underlying instruments in which the Fund intends to primarily invest and requested that the Trust withdraw the Amendment until such time as these concerns are resolved,” Angela Brickl from Direxion wrote in the withdrawal letter to the SEC. “In response to the Staff’s request, the Trust respectfully requests withdrawal of the Amendment.”
A letter from ProShares expressed the same sentiment, noting that “the request for withdrawal is being made in response to a request from [SEC] Staff” as the regulator “expressed concerns regarding the liquidity and valuation of the underlying instruments.”
Exactly what those concerns are is not hard to elaborate on. The SEC is on record as having expressed them before when rejecting applications the SolidX Bitcoin ETF, the Winklevoss Bitcoin Trust ETF and the Grayscale Bitcoin Investment Trust in 2017. The SEC said at the time that any tradable good must be on a national securities exchange “designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”
The newly withdrawn ETF applications were looking to trade in bitcoin futures on the Cboe Global Markets exchange and the Chicago Mercantile Exchange, not bitcoin itself as the ETFs rejected in 2017 were. Bit the fact that bitcoin futures are linked to bitcoin’s price directly ties into the “liquidity and valuation of the underlying instruments” on a nationally regulated exchange. The bitcoin futures themselves have also come into question, with investors facing hefty losses.
The news did nothing to assist bitcoin in trading Tuesday. The cryptocurrency was still vacillating in the same price range it has since Dec. 23. Bitcoin did drop somewhat from yesterday, to $14,315.09 as of 10:15 p.m. EST, although that drop may be more closely related to claims China is looking to ban bitcoin mining.
Image: fdecomite/Flickr
Since you’re here …
… We’d like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.
If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.
