CBOE Refiles Proposed Rule Change for BTC Exchange-Traded Fund

CBOE Refiles Proposed Rule Change for BTC Exchange-Traded Fund

Just one week after CBOE temporarily withdrew their ETF proposal against the backdrop of a partial US government shutdown, the options exchange moves to resubmit. The proposal, if approved, will supposably heighten liquidity by injecting more money into the cryptocurrency market

On the 31st of January, Gabor Gurbacs, Digital Asset Strategy Director of VanEck, notified the public about the Chicago Board Options Exchange (CBOE) re-filing of the VanEck/SolidX rule change proposal with the US Securities and Exchange Commission.

As of this time, the application has not been made available in the Federal Register, thus a countdown to an SEC decision has yet to begin. As soon as it is published, the commission will have until 240 days to arrive at a conclusion whether to approve or reject the intended rule change.

In the event of approval, the CBOE BZX Exchange will be permitted to publicly list shares of their BTC ETF Trust.

The Proposed Rule Change for VanEck/SolidX Bitcoin ETF

The Exchange [CBOE BZX Exchange] proposes a 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.

Cboe SEC Proposal Form 19-b

CBOE BZX Exchange Inc. proposes a rule change to be allowed to list and trade SolidX Bitcoin Shares which are issued by the VanEck SolidX Bitcoin Trust.

SolidX Bitcoin Shares will mirror the cryptocurrency's market price – minus Bitcoin Trust operating expenses. As stated in the application, the realization of this objective will be done through ‘substantially’ investing all assets in BTC OTC markets, and perhaps even in exchanges, contingent on liquidity and the ‘discretion’ of VanEck/SolidX Bitcoin Trust.

Only a limited amount of money (cash), used for operating costs and asset basket trade-in, will be held by the Trust.

The Players

The document establishes that the VanEck SolidX Bitcoin Trust will hold the ‘custody of the Trust’s Bitcoin’ and SolidX Management, LLC as the Bitcoin Trust Sponsor.

The Bank of New York Mellon will be of service as an administrator. The bank will provide transfer services and act as the ‘Cash Custodian’ of the Trust.

Foreside Fund Services, LLC will perform marketing duties in relation to asset baskets, while VanEck Securities Corporation will aid in marketing the shares of the Trust.

Past SEC Delays and a Withdrawal

On 6 June 2018, VanEck and SolidX ventured together for a bitcoin exchange-traded fund. By August of that year, the SEC postponed meting out a decision until the end of September. But by December a decision was once again delayed for 27 February 2019 before the proposal was withdrawn by CBOE on 23 January 2019.

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