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The SEC Release on Postponement of Voting

The Securities and Exchanges Commission has postponed voting on the Cboe Bitcoin ETF a release posted on the SEC’s website, today.

The release, titled “Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings to Determine Whether to Approve or Disapprove a Proposed 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,” is a bit misleading to those who may not be aware that this is in fact a postponement of the voting on whether or not to approve Cboe’s Bitcoin ETF.  The proposal was originally published for comment on July 2nd, 2018, in the Federal Register.  On August 7th, 2018, the SEC designated a longer period within which to approve or disapprove the proposed ETF.  This order is essentially a reiteration of that same designation, and an encouragement for others to comment on the proposal.

“On June 20, 2018, Cboe BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)1 and Rule 19b-4 thereunder,2 a proposed rule change to list and trade shares of SolidX Bitcoin Shares (“Shares”) issued by the VanEck SolidX Bitcoin Trust (“Trust”) under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares. The proposed rule change was published for comment in the Federal Register on July 2, 2018. 3

On August 7, 2018, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 As of September 19, 2018, the Commission has received more than 1,400 comment letters on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act7 to determine whether to approve or disapprove the proposed rule change. “

Business as Usual for the SEC… What’s the Effect?

Typically, when an ETF is postponed or denied, a sharp drop in price follows shortly afterward.  As of yet, the price of Bitcoin remains at a value of $6,403.82 at the time of writing (CoinMarketCap).  Since this news is extremely fresh, it is difficult to discern whether or not the stability will continue. At first glance, it does appear that expectations are possibly being factored into price, by the market. The simple fact that all of the previous ETF proposals have been denied or postponed, may be resulting in a lack response from price movers…  If you have been following the transgression of the Bitcoin ETF Saga, this news likely comes as no surprise.

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1 15 U.S.C. 78s(b)(1).
217 CFR 240.19b-4.
3 See Securities Exchange Act Release No. 83520 (June 26, 2018), 83 FR 31014 (July 2, 2018) (“Notice”).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 83792 (Aug. 7, 2018), 83 FR 40112 (Aug. 13, 2018). The Commission designated September 30, 2018, as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change.
 

 


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