VanEck: Bitcoin-ETF SEC Can Change the Rules of the Game Indefinitely


The US Securities and Exchange Commission (SEC) published a memorandum of the meeting, which the agency held on October 9 with representatives of VanEck and SolidX companies interested in launching a bitcoin fund traded on an ETF.

Representatives of the Chicago Board Options Exchange (CBOE) also took part in the meeting.

As follows from the document, VanEck, whose application was postponed in the summer, named five reasons why the market is ready to launch a new instrument. Representatives of the company also noted that they have eliminated the reasons that were indicated in the regulator’s refusal.

  • There now exists a significant regulated derivatives market for bitcoin
  • Relevant markets – Cboe, bitcoin futures, OTC desks – are regulated
  • Concerns around price manipulation have been mitigated, consistent with approval of prior commodity-based ETPs
  • Cboe’s rules are designed to surveil for potential manipulation of Trust shares
  • Promotes investor protection

Earlier, the SEC also stated that the regulated markets for bitcoin derivatives do not have a “substantial” size, and in this regard VanEck, SolidX and CBOE accused the Commission of constantly changing the rules of the game.

“We are concerned that the concept of ‘essential’ is an ever-changing quantity for the SEC. We have not been given an explanation of what is meant by “significant”, and this allows them to constantly change the rules of the game,” they said.

On Tuesday evening, SEC Commissioner Kara Stein in an interview with Bloomberg TV said that the agency still has not decided on the position regarding the launch of Bitcoin-ETF. According to her, companies must prove that they can provide the necessary liquidity, physical storage, and accurate pricing, despite sharp price fluctuations.

At the same time, Stein declined to comment on the possible timing of a decision on the VanEck application. According to the rules, the agency must make it until March 2019.

In September, the agency announced the start of a formal process to review the application for creating Bitcoin ETFs from VanEck and SolidX, but again requested “additional information.”

“Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.” – can be found in the document.

SEC has received more than 1400 comments. Example:

So, before September 30, the department had to decide on the decision: to approve, refuse or initiate the process of the proceedings. The SEC chose to delay the process again until next year.