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In An Application to SEC, CBOE Makes the Case for Bitcoin ETF License

July 10, 2018 14:19
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Chicago Board of Exchange (CBOE) has filed an application to the US Securities and Exchange Commission (SEC) asking for a license for Bitcoin derivative, Bitcoin Exchange Traded Fund (ETF).

The CBOE Bitcoin ETF, if approved, will allow over-the-counter (OTC) trading for eligible investors and at the same time, provide investors with insurance and security. According to the SEC’s official statement, the application was filed on June 20.

The application states, “The Exchange filed a proposal to list and trade shares of SolidX Bitcoin Shares (the “Fund”) issued by the VanEck SolidX Bitcoin Trust (the “Trust”), under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares.”

This is the third time, VanECK has filed for a similar application. The applications were turned down, the previous two times. Citing that the market was completely unregulated the SEC had said, “Based on the record before it, the Commission believes that the significant markets for Bitcoin are unregulated. Therefore … the Commission does not find the proposed rule change to be consistent with the Exchange Act.”

The application before the SEC states, “According to the Registration Statement, the Trust will invest in bitcoin only. The activities of the Trust are limited to: (1) issuing Baskets in exchange for the cash and/or bitcoin deposited with the Cash Custodian or Trust, respectively, as consideration; (2) purchasing bitcoin from various exchanges and in OTC transactions; (3) selling bitcoin (or transferring bitcoin, at the Sponsor’s discretion, to pay the Management Fee) as necessary to cover the Sponsor’s Management Fee, bitcoin Insurance Fee, Trust principals’ and employees’ salaries, expenses associated with securing the Trust’s bitcoin and Trust expenses not assumed by the Sponsor and other liabilities; (4) selling bitcoin as necessary in connection with redemptions; (5) delivering cash and/or bitcoin in exchange for Baskets surrendered for redemption; (6) maintaining insurance coverage for the bitcoin held by the Trust; and (7) securing the bitcoin held by the Trust.”

At the moment of writing this article, it is not clear whether the third time will be the charm. However, one positive news from this, is that the SEC has announced earlier, that it will not be regulating bitcoin.

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A blockchain enthusiast, a wannabe-crypto investor and an all-around enthusiast! Loves travelling, especially to ASI-protected areas, believes in giving her best shot at everything she does! Definitely an introvert.

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