The U.S. Securities Exchange Commission (SEC) earlier this week announced that it is delaying its decision whether to approve the listing of SolidX Bitcoin Trust on the NYSE Arca exchange.
Meet SolidX Bitcoin Trust
Blockchain technology company, SolidX Partners Inc, first filed a registration statement (Form S-1) with the SEC on July 11, 2016, proposing to launch its SolidX Bitcoin Trust. According to the company’s letter to the SEC in November last year:
The Trust is functionally almost identical to existing physically backed exchange-traded products, which have become an important component of the market. The Sponsor submits that it is in the public interest to permit the development of the Trust, which will enable a new and compelling investment option to investors.
SolidX Bitcoin Trust will not be actively managed. There is no minimum investment. “An investor may hold as little as a single share, which represents approximately one tenth of a bitcoin,” the company told the SEC. In addition, the company has secured “significant insurance coverage for the bitcoin that will be held by the Trust.”
SolidX’s Filing Progress
SolidX Bitcoin Trust is to be listed on the New York Stock Exchange (NYSE) Arca under the symbol XBTC. NYSE Arca is the first all-electronic exchange in the U.S. It currently trades more than 8,000 exchange-listed securities and is ranked number one in the listing and trading of exchange-traded product, according to its website. On July 12, NYSE Arca filed with the SEC to list and trade SolidX Bitcoin Trust’s shares.
After the SEC repeatedly extended the period to consider approving or disapproving the listing, the Commission announced early this week:
The Commission, pursuant to Section 19(b)(2) of the Act,9 designates March 30, 2017 as the date by which the Commission should either approve or disapprove the proposed rule change.
The Commission has received seven comments from the industry. All of them were in favor of approving SolidX Bitcoin Trust except one. Ken I Maher’s short and abrupt message to the SEC urged the Commission to consider the risks of the bitcoin ecosystem.
Other letters to the Commission includes one submitted collectively by 30 industry leaders such as 21 Inc’s Balaji Srinivasan, Bitpay’s Stephen Pair, Bitstamp’s Nejc Kodrič, Blockchain’s Marco Santori, Circle’s Joshua Lim, and Coin Center’s Jerry Brito. They urged the SEC to approve SolidX Bitcoin Trust’s listing stating that:
Access to bitcoin exposure needs to be nondiscriminatory in nature: an investor should not be excluded from this asset class merely because they are unfamiliar or uncomfortable with the technological processes involved in safely procuring and holding bitcoin.
Denise Krisko, President of Vident Investment Advisory LLC, told the SEC “The trust will benefit investors and the broader Bitcoin ecosystem through access to a liquid and transparent product that will further drive this innovative and exciting technology.” Joseph Colangelo, President of Consumers’ Research, told the Commission that “Bitcoin has established itself as a significant new asset class,” stating “the SolidX Bitcoin Trust will protect U.S. consumers in a way that truly bears in mind the best interest of such consumers.”
Meanwhile, Cato Institute’s Associate Director, Thaya Brook Knight noted that “approving the rule change would ultimately promote investor protection, and would therefore forward the mission of the SEC.”
Do you think the SEC will approve SolidX’s listing on the NYSE Arca in March? Let us know in the Comments section below.
Images courtesy of Shutterstock, NYSE Arca, SolidX
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