VanEck, a US asset manager is attempting again to get regulated bitcoin exchange-traded funds approved by the US Securities and Exchange Commission.
The company offers ‘VanEck Bitcoin Trust’ for trading on the Cboe BZX Exchange. It bases the fund on data drawn from five crypto-exchanges.
VanEck filed with the US top watchdog for a regulated ETF that would track MVIS(r) CryptoCompare Bitcoin Benchmark Rate, which already serves as a reference rate for funds, asset managers and exchanges who wish to build financial products on bitcoin.
VanEck explained that the index seeks to capture the total returns for investors in the largest crypto asset. The new ETF differs from previously-filed similar proposals in that it will safeguard Bitcoin holdings with a regulated third-party custodian and as the index draws prices from a large number of cryptocurrency exchanges.
You can read the Statement further
The Trust will hold Bitcoin in order to meet its investment objective. It will also value its Shares daily based upon the MVIS(r), CryptoCompare Bitcoin Benchmark rate. This rate is calculated based prices that are contributed by the Sponsor’s affiliate, MV Index Solutions GmbH (‘MVIS’), according to the industry-leading CryptoCompare Exchange Benchmark report. VanEck Digital Assets, LLC, (the “Sponsor”) is the Trust’s sponsor. Delaware Trust Company (the “Trustee”) is the Trust’s trustee.  (the “Bitcoin Custodian”) is the Trust’s custodian, and will keep all Trust’s bitcoin in its name.”
The bitcoin ETF shares won’t be available to retail investors when it launches, but they will allow qualified institutional players to gain exposure to cryptocurrencies without the need to deal with exchanges that frequently struggle with low public trust.
VanEck has applied before for a physically-backed exchange-traded product. SolidX, a blockchain technology company, was the first to apply. Some had argued that the proposal from New York-based VanEck, the ninth biggest ETF provider, was more likely to gain approval thanks to plans for a high minimum share price that would discourage retail investors.
Their collective offering was stopped several times by the SEC, who cited market manipulation fears.
VanEck and its associates tried to avoid the regulatory rejection by using Rule 144A. This provides a safe harbor from SEC registration requirements. This rule was specifically introduced in 2012 to exempt privately placed securities from registration restrictions. However, the shares can only be sold to qualified institutional buyers and have shorter holding periods.