The hopes for a first bitcoin exchange-traded fund (ETF) have been dealt yet another blow after Cboe Global Markets’ BZX Exchange withdrew its application that had sought approval for the listing of a VanEck /SolidX bitcoin ETF.
The U.S. Securities and Exchange Commission (SEC), via its deputy secretary Eduardo Aleman, published a notice on Wednesday, January 23 stating that Cboe’s BZX Exchange had filed its withdrawal notice on January 22, 2019.
The firm filed the VanEck ETF proposal in June 2018, which materialized after investment firm VanEck partnered SolidX, a financial services provider, to offer a physically-backed bitcoin ETF.
Being a physically-backed product, the exchange-traded fund would have allowed holders to have bitcoin, unlike other proposals that were derivative-based.
It’s worth noting that the SEC postponed any decision concerning the proposal thrice- in August, September, and in December last year. In September, the securities regulator asked for comments from the public regarding the ETF.
The regulator also held a meeting with the VanEck ETF teams from Cboe, VanEck, and SolidX and was expected to deliver its final decision on February 27.
The notice to withdraw the application does not provide reasons for the move, although securities lawyers and experts have speculated that it could be linked to the ongoing U.S. government shutdown.
The SEC website has a notice informing the public that its staff are “available” and will respond to certain emergencies that may involve “market integrity and investor protection,” as well as law enforcement.”
However, most of the other functions remain closed, meaning that the proposal would not have been reviewed.
Gabor Gurbacs, VanEck’s director of Digital Asset Strategy, has said that the withdrawal is temporary told CoinDesk that the filing “had been temporarily withdrawn.”
According to Gurbacs, the firm was actively involved in efforts to build the “appropriate market structure frameworks for a Bitcoin ETF and digital assets in general.”
Jan Van Eck, the CEO of VanECK told CNBC that the firm would re-file the proposal and seek for approval when SEC resumes its normal operations.
Eck noted that the firm would try to “clearly and convincingly” make its case to the regulators, but that would only be the when the government reopens.
Legal experts believe that pulling the proposed rule change is the correct thing to do in the current circumstances (with the government shutdown).
Attorney Ethan Silver of Lowenstein Sandler said that forcing the issue would see the SEC deny it (the ETF)than to put itself in a tricky position by approving it on a technicality.
The Bitcoin market’s reaction to the news has been minimal, perhaps due to the many delays that the VanEck SolidX Bitcoin ETF has been subjected to in the last six months. According to XBT.net, BTC is trading at $3,601 at the moment and has dropped less than a percent on the day.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.