The SEC Delays VanEck Bitcoin ETF Decision to End of February 2019

On Thursday, December 6, the U.S. Securities and Exchange Commission (SEC) published an official document saying that it has now moved the final deadline for the approval of the VanEck-SolidX Bitcoin ETF to February 27, 2019.

Earlier this year in July 2018, VanEck SolidX Bitcoin Trust partnered with the the Chicago Boards Options Exchange (CBOE) to get a Bitcoin-based exchange-traded-fund (ETF) license. The CBOE Bitcoin ETF proposal is physically-backed by BTC tokens. The Bitcoin ETF filed by these giants together has been under the review of the SEC since then, and is facing continuous delays.

According to the Securities and Exchange Act, the commission must “issue an order approving or disapproving the proposed rule change not later than 180 days” after the first publication of the notice. However, if the commission finds it necessary it can further extend this period by 60 days.

Note that this is the last extension which the SEC can afford. Post Feb. 27, the SEC needs to take a final call whether to approve or reject the Bitcoin ETF.

The SEC has been blunt on denying Bitcoin ETF proposals this year. In 2018, the SEC has denied almost a dozen of Bitcoin ETFs so far filed by different firms. One of the common reasons which the SEC cites is the inability of the exchanges to deal with crypto market manipulation and volatility.

Last week itself, SEC Chairman Jay Clayton said that probability of Bitcoin ETF arrival seems less unless exchanges deal with market manipulation. He said that unlike stock exchanges like NYSE and Nasdaq, crypto exchanges just don’t have sophisticated tools to prevent market manipulation and other manipulative activities.

“Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade. . . When you see an asset trade on [the] Nasdaq or NYSE, there’s a great deal of surveillance preventing you and me from teaming up and pretending we’re decentralized,” Clayton added.

VanEck-SolidX is making every effort to convince the SEC that it is ready to deal with the crypto market issues. Moreover, the VanEck ETF proposal also offers over-the-counter (OTC) facilities which can deal with issues of market manipulation and volatility in much better way than the traditional exchanges. Probably this card might play in favor of the VanEck, however, looking to the SEC’s history of denying the past proposals, nothing can be said with surety.

However, soon after this news, SEC Commissioner Hester Peirce, popularly known as “Crypto Mom” for her crypto-friendly stand in the past has requested investors not to eagerly wait for the ETF arrival. She said it might come “tomorrow or in 20 years”.

Commissioner Peirce further added: “Don’t hold your breath. I do caution people to not live or die on when a crypto or bitcoin ETF gets approved. Look, it took a long time for the SEC even to establish Finhub.”