CBOE Resubmits the Bitcoin ETF Proposal for SEC Approval

The Chicago Board Options Exchange’s (CBOE), along with other financial companies VanEck and SolidX, has resubmitted the Bitcoin ETF proposal for approval with the United States Securities and Exchange Commission (SEC). VanEck digital asset policy director Gabor Gurbacs declared the public filing on Jan. 31.

The Proposal was withdrawn

The proposal was withdrawn from consideration in the month of January due to the U.S. government shutdown. At the time, VanEck CEO Jan van Eck described that the organizations registering the custom modification recommendation had been in discussions with the SEC, but those talks finished when the shutdown started. To bypass a presumable dismissal due to the cessation, the proposal was withdrawn.

On June 20, 2018, Cboe BZX Exchange (BZX) had filed with the Securities and Exchange Commission, following the Section 19(b)(1) of the Securities Exchange Act of 1934 a suggested rule modification to pitch and trade shares of SolidX Bitcoin Shares distributed by the VanEck SolidX Bitcoin Trust under BZX rule Commodity-Based Trust Shares.

Just like the earlier proposal, the new report hints a rule modification to a plan described in Section 19(b)(1) of the Securities Exchange Act of 1934 that would support the SolidX bitcoin shares to be registered and exchanged on a US exchange. The shares would be distributed by the VanEck SolidX Bitcoin Trust, which would be accountable for holding the bitcoin that supports announced shares.

According to the plan, each Share will describe a partial detailed profitable interest in the Trust’s exclusive assets. The proposal also asserts that because each share will require the same as 25 bitcoin, the organization assumes that only “institutional and other substantial investors” will be capable to manage to invest in the ETF.

[T]he Shares will be cost-prohibitive for smaller retail investors while allowing larger and generally more sophisticated institutional investors to gain exposure to the price of bitcoin through a regulated product while eliminating the complications and reducing the risk associated with buying and holding bitcoin.

CBOE Assistant General Counsel Kyle Murray registered rule modification proposal SR-2019-004 on January 30th.

The Exchange proposes a rule change to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust, under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares.

According to Gabor Gurbacs, CEO of VanEck, the enthusiasts did a hard work examining and analyzing the proposal. Gabor tweeted:

The VanEck SolidX Bitcoin ETF proposed rule-change has been submitted by CBOE. Hard work by all teams involved. Public document: https://t.co/X25lOPjiFS pic.twitter.com/C9FP4adDE8

— Gabor Gurbacs (@gaborgurbacs) January 31, 2019

The story of the SolidX ETF has been flattening since June 2018 when the organizations first listed their proposal. The SEC judgment on that proposal was postponed until September before being lingered again, with the SEC affirming a judgment would be delivered by February 27, 2019. In an unexpected twist of circumstances, the organizations reversed their primary proposal just last week.

CBOE Or NYSE?

Cboe’s appeal for a Bitcoin ETF arises just days after the NYSE declaration to start an ETF with Bitwise’s assistance. Until now no additional specifications are acknowledged about the constitutional status of this application.

Currently, the Cboe and NYSE would be the two principal contenders in the competition to start what would be the initial Bitcoin ETF in the USA. However, both have not yet announced the application in the Federal Register, indicating that the SEC has not yet been announced nor can it start the particular evaluation method.

After the application is filed in the Federal Register, the SEC by rule has 240 days to choose whether to accept it or decline it. The trading association is studying it, essentially because of the possible decisive influence, a Bitcoin ETF would have on drawing institutional investors.

Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.

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