The Securities and Exchange Commission (SEC) recently published a presentation given to agency staffers by crypto startup SolidX in late July, a move that comes days ahead of an expected decision on its bitcoin exchange-traded fund (ETF).
The public document, dated August 1, reveals that representatives from SolidX, Cboe BZX Exchange, VanEck Securities Corporation and Patomak Global Partners met with the agency on July 31. The meeting drew officials from a number of SEC offices, including the Division of Trading and Markets, the Division of Corporation Finance and the Divison of Economic and Risk Analysis, according to the memorandum.
While the document itself doesn’t provide a blow-by-blow of the meeting, it does offer insight into the arguments being made in favor of the bitcoin ETF, including “significant changes in product, market structure and overall circumstances since March 2017 disapproval” – referring to the decision made last year with respect to SolidX’s prior proposal.
The information is notable given that the SEC is expected to issue some kind of decision this month on SolidX and VanEck’s proposed bitcoin ETF, though a choice to punt its approval or disapproval forward could lead to the process extending for additional months.
Historically, the presentation argued, the approved commodity-trust exchange-traded products (ETPs) all have been “well-established, significant, regulated markets” for trading futures on the underlying commodity such as gold and silver.
The document cited the SEC’s comment at the time:
“The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop. Should such markets develop, the Commission could consider whether a bitcoin ETP would, based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act”
With that being said, the presentation made it clear that “significant changes” in bitcoin and its market structure have been made since then, for example, multiple derivatives markets are now available for bitcoin such as CME bitcoin futures, and Cboe bitcoin futures.
“All of the above are markets regulated by the CFTC (the U.S. Commodity Futures Trading Commission) and all are cleared products,” the presentation added.