SEC Receives Bitcoin ETF filing from CBOE

- July 10th, 2018

The US Securities and Exchange Commission received on June 26 an application from the CBOE Global Markets to launch a bitcoin ETF. The SEC has, to date, rejected every bitcoin ETF proposal.

Another request for a bitcoin exchange traded fund (ETF) has been filed with the US Securities and Exchange Commission (SEC), this time by the Chicago Board Options Exchange (CBOE) Global Markets.

The documents, which were submitted on June 20 by CBOE Global Markets, proposes investing in bitcoin and that the trading of the digital currency be made available to the public in addition to facilitating over-the-counter (OTC) trading. The agency is also seeking to partner with VanEck Investment and SolidX for the purpose of the bitcoin ETF.

CBOE asks in the fling to list and trade shares of the VanEck SolidX Bitcoin Trust, which is the result of a partnership between VanEck and SolidX that filed for a physically-backed ETF filing in early June. According to the SEC notice, shares of the the VanEck SolidX Bitcoin Trust are equal in value to roughly 25 bitcoin.

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Should the filing be approved, investors will be able trade a bitcoin ETF by way of ‘baskets’ of five SolidX Shares–or 100 bitcoin–on the exchange, noting that the size of a ‘basket’ is “subject to change.”

“The investment objective of the [VanEck SolidX Bitcoin] Trust is for the shares to reflect the price of bitcoin, less the expense of [its] operations,” the document reads.

The SEC filing further explains:

“According to the Registration Statement, the Trust will invest in bitcoin only. The activities of the Trust are limited to: issuing Baskets in exchange for the cash and/or bitcoin deposited with the Cash Custodian or Trust, respectively, as consideration; purchasing bitcoin from various exchanges and in OTC transactions; delivering cash and/or bitcoin in exchange for Baskets surrendered for redemption; maintaining insurance coverage for the bitcoin held by the Trust; and securing the bitcoin held by the Trust.”

All that being said, getting approval from the SEC for a bitcoin ETF hasn’t come easy– even for the Winklevoss twins. The agency first rejected the duo’s proposed bitcoin ETF filing in March 2017 due to unregulated markets.

The SEC said in its rejection at the time that minimal regulation is cause for concern “about the potential for fraudulent or manipulative acts and practices in this market.”

Meanwhile VanEck and ProShares withdrew previous applications with the SEC for their proposed bitcoin ETFs late last year, although it wasn’t made clear why the financial investment firms decided to do so.

Should CBOE receive approval from the SEC for the bitcoin ETF, it’s projected investment opportunities will be available sometime in Q1 2019.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

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