SEC Wants To Hear From You On Bitcoin ETF

October 13, 2016

The Securities and Exchange Commission is still not sure whether to approve the first bitcoin ETF, the Winklevoss Bitcoin Trust (COIN), and is now seeking more input from the public.

COIN has been stuck in the regulatory pipeline for more than two years, and the commission said late Wednesday that it needed more feedback before making a final decision. Thus far, the SEC has received six letters pro and against the bitcoin ETF.

In general terms, those in favor have argued that an exchange-traded wrapper would be the ideal, safest way for most investors to access bitcoins without having to deal with the challenges of buying the currency directly.

Some See Easier Access, Other Don’t See Enough

Like many other ETFs have done before it, this wrapper would open up reach to an asset that’s otherwise difficult for most people to access, while offering transparency and ease of trade. And the bitcoin market, one says, has matured significantly, making now a good time for this fund.

Others, however, have raised concerns about risks of such an investment. Some want more audits, more “proof of assets,” more checks and balances in place to vet those holding the bitcoins, and to regularly report on the movement of bitcoins every time one is bought or sold.

The key concern is ensuring investors that “their investment is being soundly custodied,” the feedback letter said, according to the SEC.

While there is no projected timeline for an actual launch, if approved, COIN would be a first-of-a-kind ETF that would look to capture the appeal of bitcoins—a crypto-currency that has skyrocketed to popularity amid a countermovement toward broad debasement of developed-market currencies, led by the U.S.

Today ETF investors can only access bitcoins through a small allocation in the ARK Web x.0 ETF (ARKW), which obtains its exposure through publicly traded shares of Grayscale’s Bitcoin Investment Trust (OTCQX: GBTC).

If launched, COIN would list on Bats, which owns ETF.com

Contact Cinthia Murphy at [email protected]

 

 

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