Tag: bitcoinetf

US SEC Shoots Down Latest Bitcoin ETF, Commissioner Crypto-Mom Dissents on Ruling

The US Securities and Exchange Commission (SEC) has rejected yet another bid for a bitcoin-based exchange-traded fund (ETF), this time from New York-based financial service providers, Wilshire Phoenix.

A filing posted on Feb. 26 revealed that the SEC had concluded that Wilshire Phoenix had not provided enough evidence that the bitcoin market was resistant to market manipulation.

As stated in the filing,“The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.

Wilshire Phoenix, an emerging asset management firm and partner to Coinbase Custody,first applied for the ETF last summerwith NYSE Arca.

SEC Commissioner Dissents on Ruling

SEC Commissioner Hester Peirce wrote that “the Commission applies a unique, heightened standard under Exchange Act Section 6(b) to rule filings related to digital assets” in a dissenting statement in response to the latest Bitcoin ETF rejection.

Peirce highlighted parameters that were set and heavily scrutinized in the SEC’s processing and ultimate rejection of Bitwise’s Bitcoin ETF application,that had not been applied to traditional markets offering.

Peirce wrote, “This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.”

The SEC has rejected all previous bitcoin ETF proposals filed to date.

Crypto Mom Wants Safe Harbor

Despite well-documented uncertainty between separate regulatory bodies on how to classify digital assets,  within the US blockchain and crypto space, the SEC has maintained that digital assets likely fall under US securities laws. The SEC has punctuated this stance through enforcement against high profile projects like Telegram and EOS provider, Block.One who was fined 24 million dollars for its ICO offering.

SEC Commissioner, Hester Peirce has been a breath of fresh air to the sector and has earned the moniker of “Crypto-Mom” for her bold attitude towards digital innovation.

As reported by Blockchain.News, Peirce recently doubled down on her previous suggestion to provide decentralized network developers a safe harbor and has now submitted a formal draft proposal.

The safe harbor proposal recommends that a three-year reprieve from securities law should be granted to developers and projects that can demonstrate they are raising funds and making progress towards an open-source network. These projects will be required to make full disclosures regarding their raised funds to the public.

Image via Shutterstock

Melanion Capital to Launch First EU-regulated Bitcoin-tracking ETF

The Paris-based derivatives and computer-driven fund manager Melanion Capital got the approval from the French regulators to lunch an exchange-traded fund (ETF) for tracking up to 90% correlation with Bitcoin’s price and its performance, online media ETF strategy report Wednesday.

The emerging ETF will track the Melanion Bitcoin Exposure Index, managed by BITA and is required to fulfil the regulations under the Undertakings for Collective Investment in Transformable Securities (UCITS)- the EU standards.

Up to 30 stocks in sectors will be tracked in this fund, including the current biggest proportion Argo Blockchain, and other cryptos mining and blockchain tech firms, such as Riot Blockchain, Voyager Digital and Galaxy Digital. Melanion Capital said up to 90% correlated to the price of Bitcoin.

Per the ETF Strategy, those firms which intend to be qualified as part of the index must either derive at least half of their revenues from crypto asset management and trading, crypto banking and associated services, crypto mining, and provision of crypto mining hardware, or blockchain technology, or must hold cryptocurrency assets on its balance sheet, either as cash and receivables or as investment assets, of at least $10 million. Companies must also have a market capitalisation in excess of $100m and an average daily traded value of at least $500,000.

Jad Comair, President of Melanion Capital, said:

“It is, therefore, a major step for asset managers, allocators and in general for all investors interested in bitcoin, allowing them to have an effective tool to diversify their portfolio in a UCITS compliant format,”

Yet, the Financial Times indicated that the regulations of the UCITS fund were established over 30 years ago and “do not directly address crypto like Bitcoin,” as most regulators worldwide interpret the rules to digital assets that cannot be directly held in funds unless they are linked to listed securities.

“Most pipes of the traditional financial system stop at access to bitcoin; the ETF was a real challenge because of the sensibilities and politics currently surrounding bitcoin and bitcoin investing,” Jad Comair explained.

Bitcoin ETF is a type of security that tracks the overall price of Bitcoin. It enables investors to trade and purchase shares of it on traditional exchanges, circumventing crypto trading platforms.

Last month, Grayscale revamped its ETF ambitions through a new deal with Bank of New York Mellon Corporation as its ETF services provider. BNY Mellon bank would start handling accounting and administrative services Grayscale Bitcoin Trust starting from October. 

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