The Chicago Board Options Exchange (CBOE) on January 22 withdrew its proposal for a rule change which will allow them to list and trade Bitcoin exchange-traded fund (ETF). The U.S. Securities and Exchange Commission (SEC) revealed this on January 23, stating that there are currently no proposals to list and trade these Bitcoin ETFs on exchanges.
CBOE Withdraws Rule Change Proposal for the Listing of ETFs
CBOE has recently withdrawn its proposal for a rule change by the SEC which would’ve allowed the company to list and trade Bitcoin ETFs. The latter is said to be securities that track a stock index, assets, or a commodity. In this case, CBOE’s Bitcoin’s ETF offered by VanEck SolidX Bitcoin Trust was intended to use shares in monitoring Bitcoin’s price according to SEC’s document from June 5, 2018.
The request withdrawal for a U.S.-based regulated Bitcoin ETF is significant to the crypto industry as a whole. This is because there is a popular belief that its approval by the financial regulators would’ve led to massive adoption of virtual currencies. However, reports hold that the CBOE is uncertain if their proposal would’ve been accepted given that its approval date was moved from August 7, September 20, to December 6 and finally February 27, this year.
According to the SEC:
The Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.
U.S. Shutdown Presumed to Have Led in the Recent Development
In the same vein, the recent U.S. shutdown is presumed to have also impacted on the firm’s decision. This is because even if these Bitcoin ETFs were approved, the government’s actions might eventually lead to a takedown of the initiative. Some crypto experts, on the other hand, are not quick to blame the government, but the project itself which they believe is unattainable.
Jake Chervinsky, an attorney in Washington, D.C. said although CBOE has not outrightly stated why they withdrew their request, the firm’s action shows that they were uncertain if the SEC will approve their proposed rule change. He further stated that this might be a good thing for the industry because disapproval would’ve set a bad trend for the future. Therefore there will be no Bitcoin ETF in the first quarter of 2019.
Chervinsky’s assumptions were later confirmed to be true given that Gabor Gurbacs, the head of VanEck’s in a Tweet said CBOE is “actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general.”