Crypto ETF Foiled: Cboe Withdraws Bitcoin ETF Proposal

The race to launch cryptocurrency exchange-traded funds stumbled once again as Cboe BZX Exchange shelved its proposal for a coveted bitcoin ETF license, a filing with the Securities and Exchange Commission (SEC) shows.

The application was initially filed by Cboe in collaboration with money management firm VanEck and blockchain company SolidX in June 2018. SolidX was the third company to file for a bitcoin exchange-traded product with US regulators. Some had argued that the proposal from New York-based VanEck, the ninth biggest ETF provider, was more likely to gain approval thanks to plans for a high minimum share price that would discourage retail investors.

However, for the third time, the SEC last month has pushed the deadline to decide on the proposed ETF to February 27, 2019. A decision was expected no earlier than December 29, 180 days from the time the ETF duo submitted their application for the fund.

Bitcoin ETF Proposals Facing Regulatory Hurdles

Last year, the company withdrew an application to list a bitcoin derivatives ETF after the SEC said it wouldn’t review a petition for a fund that intends to invest in virtual assets that aren’t yet available. In addition, the agency refused to grant an exemption that would have let SolidX become the first bitcoin-based ETF to launch on the New York Stock Exchange (NYSE).

The SEC repeatedly delayed deciding on the application, first extending the time it had to act on the proposal in August, then instituting formal proceedings to determine approval in December, and again extending its deadline to 2019.

Despite investor interest, it seems unlikely that the SEC would be comfortable using bitcoin as an underlying asset in a regulated investment vehicle any time soon.

The SEC also denied a request to approve the Winklevoss twins’ bid to list a bitcoin ETF on the BATS exchange.

(Photo: Jiefei Liu/MEDILL)

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