As the crypto-world waited on tenterhooks for a decision in regards to the VanEck Bitcoin ETF, the SEC announced again that they hadn’t made one.
After several prior delays, there was a glimmer of hope that this time the SEC would make history by approving the first crypto ETC, but sadly this was not to be. The decision has now been postponed until 19 August as the SEC have asked for more information from VanEck.
Whilst realists had accepted that the chance of approval was slim at this point, there were some who thought that this could be the right time.
As expected, the SEC has delayed the VanEck bitcoin ETF proposal. Read the order here: https://t.co/OB3TBgVGwg.
VanEck's new deadline is August 19. The SEC can & likely will delay one more time for a final deadline of October 18.
Looks like this ended up the right explanation: https://t.co/bkzeVRt1Hg
— Jake Chervinsky (@jchervinsky) May 20, 2019
But American lawyer, Jake Chervinsky tweeted that the delay was not unexpected and that we could even see the decision pushed back again to October.
Then, the Bitwise ETF decision was delayed yet they remained tight-lipped on the future of VanEck. This was deemed as unusual behavior for the SEC who usually make a group of announcements simultaneously, rather than one by one. This combined with the fact that SEC Commissioner Hester Pierce aka Crypto Mom was speaking at the Consensus conference led some to believe that VanEck might defy the odds.
But then, yesterday, the news broke that it was a no- for now at least.
The information and clarifications that the SEC have asked for is vast and consists of 14 main questions that are then broken down into 39 sub questions that need to be clearly answered. Most of the concerns of the SEC revolve around concerns of market manipulation, in fact the words ‘manipulation’ or similar appear 18 times in the SECs report.
For example: Q1. What are commenters’ views on whether there is a reasonable likelihood that a person attempting to manipulate the Shares would also have to trade in the bitcoin futures market to manipulate the Shares?
Q2. Does the market, spot or futures, in which price formation occurs affect commenters’ analysis of whether it is reasonably likely that someone attempting to manipulate the Shares would have to trade in the bitcoin futures market, or that trading in the Shares would be the predominant influence on prices in the bitcoin futures market?
Q12. What are commenters’ views of the Exchange’s assertions that the Sponsor believes that demand from new, larger investors accessing bitcoin through investment in the Shares will broaden the investor base in bitcoin, which could further reduce the possibility of collusion among market participants to manipulate the bitcoin market, in light of the possibility that broker-dealers may offer fractional shares to their customers?
The report also notes that the rules of the national securities exchange should be “designed to prevent fraudulent and manipulative acts and practices to promote just and equitable principles of trade”.
In other words, the SEC are still not convinced that cryptocurrency is safe from bad actors and dubious market practices. Additionally, matters such as trading volumes and the viable size of the market also seem to be causing some concerns.
Whilst the SEC remains suspicious, VanEck should at least take comfort in the fact that it was not a ‘no’, and that the number of questions that have been asked could be interpreted as willingness to understand. Whether they will get approval in August, or October for that matter remains to be seen but the fact that they seem to be at least discussing it is promising to say the least.