Jay Clayton, chairman of the U.S. SEC
Andrew Harrer/Bloomberg via Getty Images

How The SEC Stole Christmas: VanEck ETF Decision Postponed

BLOCKTV Staff
Allon Sinai
06 December, 2018
1 min read
SHARE
ftlnln

Crypto investors hoping for an end of year surprise from the U.S. SEC in the form of an approval for a Bitcoin futures ETF, will be sorely disappointed. The office issued a statement on Thursday announcing that the much-anticipated decision on the VanEck/SoildX ETF proposal would be postponed until February.

"The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,10 designates February 27, 2019, as the date by which the Commission shall either approve or disapprove the proposed rule change," read a statement issued online.

The quest for the first U.S. SEC-approved crypto ETF has gripped the ecosystem over the past couple of years. The regulatory body's vote of confidence could invigorate the slumping market and a rejection could erode investors' hopes and send prices dropping.

 

 

How Does it Work?

The ETF approval process follows a standard formula. After receiving a request for a proposed rule change, the SEC posts notice in the Federal Register and solicits comments. It then has 45 days to approve or deny the ETF, or it can extend the deadline up to three times. The first extension is for 45 more days, the second for 90 days, and the final one for 60 days; all in all a maximum total of 240 days after the completion of the filing.

The VanEck/SolidX proposal has already been delayed twice. Unlike previously rejected propositions, the VanEck/SolidX fund would be a physically-backed Bitcoin ETF, will also be insured, and will set the initial price of the fund at $200k.

The direct correlation between ETF denials and delays and the dramatic drops in the price of Bitcoin and other digital tokens has got the market hanging on every announcement coming out of the U.S. Securities and Exchange Commission.

In recent public statements, SEC chairman Jay Clayton has said that the ETF will not be approved until it can be proven that it is "free of significant risk of manipulation" and that the risk in trading is that of the "value of the underlying asset and not the risk of theft and disappearance."

All eyes are now on the market to see if the postponement will cause the price of Bitcoin and other currencies to fall, exacerbating a weeks-long price plummet that saw values drop by nearly 50 percent. 

 

Some consolation for the community lies in the fact that this is the last possible deferral and that February 27 will end the saga one way or another.

Bitcoin SEC Cryptocurrencies ETF crypto regulation Bitcoins Futures claytojay