Trusts controlled by U.S. companies Rafferty Asset Management LLC and Exchange Traded Concepts LLC canceled plans to launch three bitcoin ETF products, citing concerns by the Securities and Exchange Commission (SEC), Reuters reports.
Two U.S. companies put their bitcoin ETF proposals in cold storage, over concerns coming from the Securities and Exchange Commission, filings showed on Monday.
According to one of the filings, the federal government agency responsible for protecting investors “expressed concerns regarding the liquidity and valuation” of contracts based on bitcoin.
Fund managers expected their bitcoin exchange-traded funds (ETFs) to get approved, given the recent successful launch of bitcoin futures contracts on both the CME and the CBOE exchanges, last month.
Futures contracts in the U.S. are governed by the Commodity Futures Trading Commission (CFTC), while ETFs fall under SEC’s jurisdiction.
With SEC giving bitcoin ETF products the cold shoulder and CFTC consenting to bitcoin futures contracts, there is a rare public divergence between the two financial regulatory agencies over how to regulate BTC products. The CFTC has been under pressure to address concerns it did not fully assess the potential risks that bitcoin poses to the financial system.
Per Reuters, one of the bitcoin ETF products being put forward would be designed to rise or fall in price twice as fast as the price of bitcoin on a given day.
Last month’s smooth bitcoin futures launch could pave the way for other cryptocurrency products, CBOE Chief Executive Ed Tilly said in an interview, on December 12. According to Tilly, the Chicago-based derivatives exchange plans to wait until there have been a couple of settlements on the one-month bitcoin futures contracts before it moves forward with any new cryptocurrency products. Bitcoin ETF products and options on futures contracts are some of the mapped out plans for CBOE.
At press time, bitcoin (BTC) is down 2.9% percent on the day against the dollar, changing hands at roughly $14,700. BTC has a current market cap of over $250 billion (33.7% of the aggregate value of all existing cryptocurrencies) and has edged up 7.07% YTD against the dollar.
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