SEC Postpones Bitcoin ETF Decision To Feb 2019

The SEC has postponed a decision on a bitcoin ETF proposal submitted by investment firm VanEck to Feb 27 next year. VanEck and SolidX proposed a physically-backed ETF meaning that it would be settled using actual bitcoins as opposed to cash. The proposal was submitted in June 2018. Cboe followed up that application with one of its own to list and trade bitcoin ETFs and representatives from VanEck and SolidX met with regulators in October to further discuss it. 

In its letter yesterday, the SEC stated that it had received 1600 comments regarding the proposal. “The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change,” the SEC wrote. Per rules, this is the final postponement allowed to the SEC and the agency will have to issue a decision on Feb. 27. 

The approval of a bitcoin ETF is seen by many as a precipitating factor for the entry of institutional money into bitcoin and cryptocurrency markets. But the SEC has rejected a majority of bitcoin ETF proposals submitted by investment firms. The agency cited a range of concerns, from security at crypto exchanges to the lack of custody and insurance solutions in the crypto markets, as reasons for its rejection in a January letter. 

“Postponement has become the default,” said Hunter Horsley, CEO of Bitwise Investments – an asset management – a San Francisco-based firm which also has a bitcoin ETF proposal pending with the agency. “The SEC has done a great job of making it clear what they’re thinking about and progress is being made on those issues.” 

Others were not as charitable about the agency’s stance. “America wants a Bitcoin ETF,” tweeted Alex Sunnarborg, founder of hedge fund Tetras Capital, quoting from a podcast. In a tweetstorm, Sunnarborg said the SEC was being “relatively extremely tough” regarding a bitcoin ETF. He said bitcoin was uniquely manipulated (one of the SEC’s main concerns) and that bitcoin markets may actually be cleaner than other markets because they have a public blockchain with transaction information.