SEC Delays VanEck BTC Decision, Sets Deadline For November 14th

The SEC extends its consideration for VanEck’s bitcoin ETF application to November after three extensions.

By
Chung Yee
on
September 12, 2021
Category:
Blockchain News

Why the Delay?

The Securities and Exchange Commission (SEC) has officially set the VanEck bitcoin Exchange-Traded Fund (ETF) decision deadline for November 14. In an official notice dated September 8, the SEC has pushed the decision on a submission that VanEck filed at the beginning of March this year.  

The regulator has 180 days from the publication of the date of filing to decide. However, if deemed necessary, it can extend its decision for another 60 days by publishing its reason for the extension. The SEC has delayed delivering the decision on America’s first crypto ETF on three occasions.

“The Commission finds that it is 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 the proposed rule change and the issues raised in the comment letters that have been submitted in connection therewith,” the SEC wrote, justifying the extension for a final determination on VanEck’s application.

Many investors are eagerly awaiting America's first bitcoin ETF after its neighbor, Canada, approved its first bitcoin ETF, Purpose Bitcoin ETF, on February 18, 2021. And Brazil, to the South, approved one in June. Crypto ETFs are investment funds tied to underlying crypto-assets and can be traded like stocks in the stock exchange.

Source: The SEC published the proposed rule change for comments on March 19, cites the need to further extend its decision till November 14 to study the comments 

Many investors are eagerly awaiting America's first bitcoin ETF after its neighbor, Canada, approved its first bitcoin ETF, Purpose Bitcoin ETF, on February 18, 2021. And Brazil, to the South, approved one in June. Crypto ETFs are investment funds tied to underlying crypto-assets and can be traded like stocks in the stock exchange. 

SEC Exercises Caution

The announcement to delay the decision on VanEck’s application raises many questions. What is the SEC concerned about? Trading in crypto assets is legal in the United States. The classification of the asset will determine the regulatory body. ETFs are deemed as securities, and it comes within the purview of the SEC. Regulating the crypto space is the fastest way to weed out illicit activities. 

ETFs, if permitted, are meant to give Americans an alternative avenue to be exposed to crypto-assets. This alternative is both safe and secure because, unlike conventional bitcoin investment, bitcoin ETF can be seamlessly incorporated into an investment portfolio like stocks. ETFs are openly traded on the stock exchange, which is a regulated space. Bitcoin ETFs have successfully launched in Canada and Brazil without any hiccups. 

Source: Brazil launched its first Bitcoin ETF QBTC11, similar to the ETF proposed by VanEck but is still pending approval before the SEC.    

The SEC’s reluctance to state with sufficient clarity their concerns when it comes to regulating crypto assets is becoming a significant impediment for institutional adoption. Gary Gensler, the chairman of the SEC, has identified the need to prioritize regulation on crypto trading, lending, and Decentralized Finance (DeFi) platforms. Despite pointing out the regulatory cracks, the nation is still awaiting a clear regulatory framework to operate within.  

Investors Are Confused

The regulators have been reiterating the same concerns without putting into place the necessary regulation. Licensed and compliant entities like VanEck, WisdomTree, Fidelity, and Valkyrie are avenues where investors can be protected and market integrity can be preserved. The solution is present, and the regulatory framework for an ETF is not a novel concept. The reluctance of the SEC to take the appropriate action expeditiously continues to raise eyebrows. 

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.

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