VanEck/SolidX proposed an exchange traded-fund (ETF) in a report where they pointed out the key features of the ETF, awaiting the future for the very ETF, only to be eventually delayed by the United States Securities Exchange Commission (SEC). The commission has reportedly issued its own release where they have disclosed the delay owing to the fact the commission needs extra time to evaluate the fund and give out a suitable verdict.
VanEck had previously published a their own report, where they have strived to tackle the prior objections from the SEC in quite an elaborative manner. The aspect over which the commission had issues with are namely valuation, liquidity, custody, arbitrage, potential manipulation, and other risks. The report further reads,
…by offering investors exposure to bitcoin through a regulated investment product, we believe the proposed ETF will be consistent with the Securities and Exchange Commission’s (the “Commission”) mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
The SEC has always been keen on the protective side of things expecting an ETF or such proposal to deliver utmost customer protection and exclusion of scammers and fraudulent agents. VanEck has ensured SEC an entire system of ETF into the current market that can pave the safest route between the virtual assets transaction.
The report submitted to the SEC has been under continuous observation and has been set to decide whether the introduction of the ETF is upon us or the crypto-enthusaists are yet to witness another ETF denied and shattered to mere pieces, the likes of which we have seen with the Winklevoss ETF. The commission however, is at the liberty to produce the verdict on their own terms and on the date of their choosing which the crypto-zealots can do nothing about but wait. The commission states,
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.
Though the designated date of the verdict has been set on September 30, 2018, the commission is surely on the move as per the conspiracy theories to demanding additional time to decide the outcome of the VanEck proposal verdict.
The VanEck/SolidX situation has not been the first of its kind rather some history repeating as we discuss the previous Direxion case where the commission stated the very reason not to give out verdict even over the delayed time they had assigned for the very case. The words of the commission itself read,
…prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.
The SEC needs to confirm the crypto-market to take the elements of a real concrete marketplace so as to exclude any external or more colloquially, the third parties that can alter the market place in a rather adverse way.
Though many suggestions and proposals circle the crypto-world, the needs and demands the SEC has outline have been provided by a very few, or even if the bounds have been plunged over, there is not enough magnitude what the SEC seeks. The commission wants the crypto-market ripe to maturity as it filters out low-life scammers and introduces major investors and groups that are way more business oriented rather than mere manipulation of the already present customers or investors.
VanEck has issued several statements stating the volatility of the bitcoin or equivalent cryptocurrencies do not differ one bit than the concrete assets, the likes of gold mines and other relevant monetary properties. The statement is somehow a blow to what the SEC idealizes as it does not simply regard the crypto-market anywhere near the real life humungous financial market structures.
We believe that neither the volatility nor the current volume in the bitcoin futures market will inhibit the creation and redemption process by authorized participants and that these creations and redemptions will keep the proposed ETF’s market price in line with its NAV.
The company suggests the adverse agents over the crypto-world are majorly mitigated as the exchange shifts over to the U.S exchange as the SEC can develop a market place that can render users out of the scammer’s reach.
While one cannot rule out manipulation in the underlying spot market, we believe that, due to the diversified ownership and volume of trading, the market does not have major, structural vulnerabilities. Therefore, the Commission’s increased enforcement and regulatory actions can reduce the number of bad actors in a basically sound market.
The Dixerion product for which the SEC delayed the verdict, has been under the microscopic eye by the crypto-enthusiast deciding as to what is taking the SEC so long, besides the fact that the SEC has its own terms to evaluate a proposal relating to the crypto-market. The commission had the following words to say for the delay,
The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,\10\ designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.
We eventually land to the site where there are two routes to judge or opt, the SEC or the other suggesting parties but we have to stand good ground with the SEC as bearing any chance of risk can turn out quite dementing even if tend to go that route.