SolidX Partners Inc, a blockchain technology company, is giving its cryptocurrencies initiative another shot. SolidX, in collaboration with money management firm VanEck, today filed with the U.S. Securities and Exchange Commission to launch a physically-backed bitcoin exchange-traded product.
At a time where regulators seem split between loving and hating cryptos, the move puts the ninth biggest ETF provider in the bulls camp, as the firm views ETFs as a necessary step for this nascent sector to grow.
Last year, New York-based VanEck 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 Securities and Exchange Commission (SEC) 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). In an order disapproving of the proposed rule change, the agency said it believed the significant markets for bitcoin are unregulated.
Bitcoin ETF proposals facing regulatory hurdles
The SEC repeatedly delayed deciding on the application, first extending the time it had to act on the proposal in September, then instituting formal proceedings to determine approval in October, and again extending its deadline to March.
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.
SolidX was the second company to file for a bitcoin exchange-traded product with the U.S. regulators. The SEC also denied a request to approve the Winklevoss twins’ bid to list a bitcoin ETF on the BATS exchange. The watchdog based its rejection on Bats’ inability to reach “security surveillance sharing agreements” that could “help address concerns about the potential for fraudulent or manipulative acts and practices.”
Founded in 2014, SolidX Partners Inc., which develops blockchain products and services focusing on capital markets, raised $3 million from investors with the goal of offering total return swaps to large institutional bitcoin investors.
Commenting on the news, van Eck, CEO of VanEck, said: “I believe that bitcoin has emerged as a legitimate investment option, as a type of ‘digital gold’ that may make sense for investors’ portfolios. The SolidX team has in-depth experience with bitcoin, cryptography, and capital markets. We’re pleased to join with them in supporting the effort to bring a physically-backed bitcoin ETF to market.”