As further evidence of the SEC's resistance to the development of a regulated secondary market in bitcoin, on August 12 it delayed making a decision on three additional bitcoin exchange-traded fund (ETF) proposals.
On January 28, 2019, NYSE Arca, Inc. filed a proposed rule change under the Securities Exchange Act of 1934 to list and trade shares of the Bitwise Bitcoin ETF Trust. Also, on January 30, CBOE BZX Exchange, Inc. filed a proposed rule change under the Exchange Act to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust. Finally, on June 12, NYSE Arca, Inc. filed a proposed rule change to list and trade shares of the United States Bitcoin and Treasury Investment Trust.
The Exchange Act mandates that a final decision be made within 240 days of such filings. In the case of the first two proposals, the SEC exercised its discretion and found it appropriate to designate the remaining time available under the 240-day maximum period "so that it has sufficient time" to consider it. Based upon the same rationale, the SEC delayed action on the other NYSE Arca proposal for 45 days. Accordingly, it designated October 13, October 18 and September 29, 2019, with respect to the Bitwise Bitcoin ETF Trust, the VanEck SolidX Bitcoin Trust and the United States Bitcoin and Treasury Investment Trust, respectively, as the dates by which it "shall either approve or disapprove the proposed rule change."
These delays come as no surprise given the SEC's disapprovals of similar proposals to list other bitcoin ETFs, most notably the multi-year effort of investors Cameron and Tyler Winklevoss to list the Winklevoss Bitcoin Trust on the Bats BZX Exchange, Inc. In rejecting these proposals, the SEC has cited numerous concerns, including the risk of market manipulation, market surveillance and a potential divergence with futures trading as some issues. It remains to be seen whether the SEC will have the same concerns when it rules on the pending proposals.
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