Numerous companies that were looking to list exchange-traded funds (ETFs) connected to bitcoin have removed their filings at the behest of officials from the U.S. Securities and Exchange Commission.
Direxion Shares ETF Trust, Exchange Listed Funds Trust and ProShares Trust all filed paperwork to create exchange-traded products in the past month.
Yet notably, none of the proposed offerings would have held bitcoin directly.
Rather, their price movements would have been sparked by changes in the still-nascent market for bitcoin futures.
In letters dated January 8, Direxion and ELF retracted their requests, claiming feedback from the SEC.
Angela Brickl, Direxion’s secretary, wrote:
“On a call with the Staff on January 5, 2018, the Staff expressed concerns regarding the liquidity and valuation of the underlying instruments in which the Fund intends to primarily invest and requested that the Trust withdraw the Amendment until such time as these concerns are resolved.
“In response to the Staff’s request, the Trust respectfully requests withdrawal of the Amendment.”
ProShares’ letter, dated January 9, includes similar sentiment.
“This request for withdrawal is being made in response to a request from the Staff,” said Richard Morris, general counsel and secretary for ProShares.
The timing of these withdrawals is noteworthy, given that the SEC recently released two other rule change proposals which could permit a bitcoin ETF last week.
Those proposals, filed by the Chicago Board Options Exchange (Cboe), would exclude its proposed ETFs from several market manipulation rules, which oversee traditional assets.
The SEC is still asking for public input on the proposals.
Both of the proposed rule changes note that bitcoin does not work like traditional assets.
While the SEC has publicized the Cboe proposals for comment, it has a longer history of pressing for bitcoin ETF proposal withdrawals.
Several organizations dashed their ETF bids last year at the behest of the agency.
At the same time, at least two of these proposals were rebuffed because bitcoin futures contracts did not exist at the time.
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