The US Securities and Exchange Commission (SEC) a few months ago may have considered Bitcoin and Ethereum as commodities, but the road towards regulatory clarity is still far from reality considering mixed signals coming from the agency in recent weeks.
One of the main reasons for this year’s bearish market is mainly because of the regulatory changes applied by different countries in the crypto industry. Unfortunately, countries have different approaches regarding the crypto industry. There are countries such as Iran and Venezuela that made use of cryptocurrencies as its solution against an impending economic collapse and international sanctions.
As far as Bitcoin’s price is concerned as well as other altcoins, things aren’t looking as bright as last year. The good news is that there have been numerous attempts to speed up the participation of institutional investors in the crypto market. In recent months, the crypto market has been anticipating the possibility of a Bitcoin ETF. Unfortunately, a number of applications have been rejected including that of Cameron and Tyler Winklevoss. And not only that, it has already been the second time that the agency rejected their application citing the possibility of price manipulation.
The same fate has fallen on nine other Bitcoin ETF applications the SEC citing the same reason for their rejections.
Stopping Trading Confusion
The SEC is expected to make a decision on Solid X and Van Eck’s Bitcoin ETF application later this month. Until then, the agency decided to stop possible confusion among investors. The US SEC announced on Sunday that it is immediately suspending two securities that track cryptocurrencies. In a statement, the agency halts trading in Bitcoin Tracker One and Ether Tracker One in the US until at least September 20.
What exactly are these products? Both products are known for tracking the price of cryptos, not to mention it offers less fees. Both are also listed on a Nasdaq exchange in Stockholm. In the US, investors can trade “over the counter” using exchanges in the US.
In a statement, the US SEC mentioned that “It appears … that there is a lack of current, consistent and accurate information”. In addition to this, “Application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as ‘Exchange Traded Funds’”.
Bitcoin ETF Coming Soon?
The push towards having different crypto-related investment is on the rise. Unfortunately, the SEC has taken a strict stance regarding its approval, especially in the last months.
Is there a possibility that we will be seeing a crypto-related ETF soon? In an earlier statement, “Accordingly, the Commission … designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change”.
However, there has been a report entitled “Blockchain and Digital Assets: US Equity Research” made by Cannaccord researchers Michael Graham and Scott Suh who stated that there is the possibility that there won’t be a Bitcoin ETF this year. The report mentioned that: “And although the VanEck SolidX Bitcoin Trust, seen by many as the most formidable candidate for a potential approval, is due for a potential decision as early as this month, it is largely believed that the SEC will extend its deadline, in which case a decision may not be made until March 2019”.