SEC should ‘stop picking winners’: VanEck exec
Cboe filing on behalf of VanEck’s planned bitcoin ETF contains ‘surveillance-sharing agreement’ details similar to BlackRock’s proposed product
Annette Shaff/Shutterstock modified by Blockworks
VanEck has revised its spot bitcoin ETF bid in an effort to ease SEC concerns, though an executive at the fund group said the regulator should be treating all these filings the same.
Asset management giant BlackRock piqued industry attention when it, for the first time, revealed plans to launch a spot bitcoin ETF. Others such as Bitwise, WisdomTree, Invesco and Valkyrie — who have previously attempted to bring to market such a product — re-upped their efforts in the following days.
Cboe, the exchange on which VanEck’s bitcoin ETF would trade, added language in its Thursday filing stating that it expects to enter into a surveillance-sharing agreement with “an operator of a United States-based spot trading platform for Bitcoin.”
Read more: How ‘surveillance-sharing’ is designed to deter bitcoin ETF manipulation
The language is similar to that found in Nasdaq’s filing for the proposed BlackRock spot bitcoin ETF. Some have speculated the platform BlackRock is referring to is Coinbase, which would act as custodian for the proposed ETF’s bitcoin holdings.
BlackRock and VanEck declined to comment.
“Perhaps the commercial attractiveness of working as custodian with an issuer as big as Blackrock may have convinced [Coinbase] to share data it previously didn’t want to share,” Matthew Sigel, VanEck’s head of digital assets research, said in a Thursday Twitter thread.
He added: “Still, we see nothing unique/concrete in the proposed surveillance sharing agreement between Nasdaq [and] Coinbase which cannot be duplicated by other listing exchanges like the [Cboe] immediately.”
Similar to the proposed spot bitcoin ETF from VanEck, ETFs from WisdomTree, Invesco, Ark Invest, and 21Shares are also expected to trade on Cboe.
Valkyrie’s proposed spot bitcoin ETF, like BlackRock’s, would be listed on Nasdaq, while Bitwise’s proposed spot bitcoin ETF would be listed on NYSE Arca.
‘Stop picking winners!’
The bitcoin futures ETF race put on display the reality of what industry participants refer to as “first-mover advantage.”
Gary Gensler said during the Aspen Security Forum in August 2021 that the SEC would “look forward” to reviewing filings limited to bitcoin futures contracts trading on the Chicago Mercantile Exchange (CME).
ProShares was the first to launch such a fund in October of that year — gathering roughly $1 billion on its first day — marking one of the most successful ETF launches ever. Similar funds that came to market in the following days failed to gain significant assets.
Now in pursuit of a spot bitcoin ETF, prospective issuers continue jockeying for position to be first to market.
“One problem with the SEC’s approach is that, without knowing the specific preconditions for approval, issuers have been almost continuously filing costly updates and re-filings, gambling that whoever is lucky enough to time their efforts closest to a regulatory change-of-heart might reap a multi-hundred-million-dollar revenue harvest,” Sigel said.
Attempts to launch a spot bitcoin ETF date back to a try by the Winklevoss twins in 2013. The SEC has blocked more than 30 similar filings in the past decade, according to Bloomberg Intelligence data.
Sigel went as far to say in his Twitter thread that the SEC’s repeated rejections of spot bitcoin ETFs without clear reasoning is “potentially a denial of due process under the law.”
Grayscale Investments is locked in a legal battle with the SEC — stemming from the regulator not permitting the conversion of its Bitcoin Trust (GBTC) to an ETF.
“Given the nearly identical ETF applications submitted, we believe all issuers should have the same timeline to a bitcoin spot ETF,” Sigel added in a separate tweet. “Stop picking winners!”
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