Fund Managers Say Bitcoin ETF Proposals Withdrawn Due to SEC Concern

Written by:
Published on:

NEW YORK (Reuters) - Two U.S. companies shelved proposals to launch bitcoin exchange-traded funds, citing ongoing concerns by the Securities and Exchange Commission (SEC), filings showed on Monday.

Staff at the regulatory agency “expressed concerns regarding the liquidity and valuation” of futures contracts based on the digital asset, according to one of the filings.

The move adds a new hurdle to the bid by Wall Street firms to capitalize on investor interest in cryptocurrencies, and it opens a rare public divergence between two financial regulatory agencies over how to regulate them.

Trusts controlled by Rafferty Asset Management LLC and Exchange Traded Concepts LLC each canceled plans to launch three bitcoin funds that could be traded by retail investors as easily as stocks. Neither firm could be reached for comment.
Fund managers thought the proposals had a chance at winning approval given the launch last month of futures contracts based on bitcoin on both the CME and the CBOE exchanges.

Regulators have been scrambling to figure out how to deal with this relatively new asset, and no single one has control.

The SEC has dominion over funds, while the Commodity Futures Trading Commission (CFTC) governs futures contracts. The CFTC has been under pressure to address concerns it did not fully assess the potential risks that bitcoin poses to the financial system.

Bitcoin is a virtual asset that can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government. Trading has been expensive, difficult and fraught with wild price swings.

The SEC’s decisions also face close scrutiny given its power to clear the way for products that could be among the more volatile traded in U.S. equity markets.

The SEC and the CFTC could not immediately be reached for comment.

One of the ETFs being proposed would be designed to rise or fall in price twice as fast as the price of bitcoin on a given day. Over the last two years alone, bitcoin has gained or lost more than 10 percent on a single day 26 different times, according to data from the Bitstamp exchange.

Bitcoin’s price was little changed at about $15,000 Monday evening on the Bitstamp exchange.

Business/Financial News

Abra Wallet Adds Support for Bitcoin Cash, Other Cryptocurrencies

Abra Wallet Adds Support for Bitcoin Cash, Other Cryptocurrencies

Abra Wallet is the latest platform to incorporate the 4th most popular digital coin Bitcoin Cash.  The Abra app is available for both Android and iOS devices. 

Hardware Cryptocurrency Wallet Demand Grows in South Korea

Hardware Cryptocurrency Wallet Demand Grows in South Korea

According to local reports in South Korea, demand for hardware wallets is increasing exponentially. The demand has stemmed from attempted hacks last year against domestic trading platforms like Upbit and Bithumb.

Alt-Coin Bear Market Largely Over Claims Expert

Alt-Coin Bear Market Largely Over Claims Expert

Speaking to Bloomberg News Tuesday, Fundstrat Global Advisors LLC suggested that the alt-coin bear market is mostly over and this is illustrated with his firm’s measure of alt-coins showing a sharp 75 percent decline in the group over the past 64 days.

eSports Reward Token (ERT) to be Listed on HitBTC Exchange, ambitious project to become the leader in the eSports industry, announces its token issuance on one of the top CryptoCurrency exchanges, HitBTC (

UK Government to Study Cryptocurrency Risks in More Detail

UK Government to Study Cryptocurrency Risks in More Detail

Britain’s government and regulators will look in detail at the potential risks from cryptocurrencies like bitcoin, British junior finance minister John Glen said on Monday.