Crypto ETF Hopefuls Rendezvous With SEC
As reported by Ethereum World News in late-October, a number of representatives from VanEck, SolidX Partners, and CBOE, the three firms behind the leading Bitcoin ETF application, met with the U.S. Securities and Exchange Commission in a paramount closed-door meeting.
A post-mortem document revealed that the ETF-focused meeting, which occurred on October 9th, was attended by Commissioner Roisman, who has been classified as “pro-crypto” by some, four legal counsels, and five representatives from the three aforementioned finance-focused firms. Per the release of a VanEck slide deck in tandem with the post-mortem, the consortium seemingly touted that the Bitcoin ETF proposed abided with regulations and the SEC’s original guidelines outlined in the Winklevoss ETF denial.
No comments from the SEC were issued on the October rendezvous, but at the time, many investors were hopeful that the attendees of the forum were pleased with what was presented.
With the release of an official SEC memorandum, dated to November 28th, 2018, it seems that a similar event has just occurred, just six weeks after the aforementioned.
In this most recent meeting, VanEck representatives touted a 62-segment slide deck, which broke down its ETF application to its core, coupled with the current state of the cryptocurrency market at large. Discussing the latter point, the deck noted that like traditional commodities markets, the value of BTC is “tightly linked” on spot and futures markets, apparently evidence that Bitcoin is a “well-functioning capital market.”
VanEck and SolidX also drew attention to the “Breakwave Dry Bulk Shipping ETF,” claiming that the approval of this traditional markets product indicates that Bitcoin markets are, in fact, able to facilitate an exchange-traded product.
The financial firms went on to draw attention to the “resilience of bitcoin markets,” claiming that the fixed supply, distributed, and secure nature of the cryptocurrency ecosystem would disallow manipulation.
The three aforementioned points, of course, address the SEC’s concerns that the Bitcoin industry isn’t of “significant size” and would be susceptible to manipulation from bad actors.
VanEck went on to laud CBOE’s system, which the ETF would be based upon, for its speed, security, and ability to stay compliant with financial law, something that the SEC is likely clamoring for.
Last but not least, the Bitcoin ETF hopefuls went on to break down its institutional-focused proposed product, which will reportedly be listed at $250,000 a pop. Like the original meeting, the governmental agency was hesitant to comment on this closed-door meeting. Regardless, many see this meeting as a promising sign for the eventual approval of a crypto-centric ETF on U.S. markets.
Not So Fast: SEC Commissioners Still Worried About Bitcoin ETF
Although valiant strides have been made towards the cause of a U.S.-based, fully-regulated Bitcoin ETF, a number of SEC commissioners recently expressed their concerns for such a vehicle, which would be a ‘precedent-setter’ if green-lighted or denied.
As reported by Ethereum World News just days ago, SEC incumbent Jay Clayton, who assumed office in May 2017, exclaimed that he isn’t ready to greenlight a Bitcoin ETF at Consensus: Invest. Giving his heated statement some credence, while referencing the SEC’s role of mitigating investor risk in financial markets, Clayton first brought up the lack of market surveillance in crypto markets.
While blockchains are predicated on a semblance of transparency, in juxtaposition to this nature, the SEC decision-maker noted that there’s an evident lack of bonafide surveillance implementations on crypto platforms at large.
Clayton then explained that investors expect that a commodity-backed fund is free from manipulation, alluding to his sentiment that Bitcoin is susceptible to questionable price action on a group’s whim, or through orders executed by bad actors.
Along with his fears regarding proper surveillance measures, Clayton also touched on his opinion that while strides have been taken towards impenetrable custody solutions, these crypto-centric services still are lacking.
While the Commissioner’s statements aren’t a bullish sign, there’s a silver lining, as the SEC’s 4,600 employees aren’t known to have homogeneous views on specific markets and products, whether nascent or otherwise. In a testament to this, Hester Peirce recently claimed that a Bitcoin ETF on U.S. markets is possible, far from impossible.
Title Image Courtesy of Samuel Zeller on Unsplash