VanEck, SolidX to Offer Limited Bitcoin ETF for Institutions Via Exemption

VanEck Securities and SolidX Management want to start selling shares in a limited version of a Bitcoin ETF, using a rule that exempts the shares from securities registration, under which shares can be sold only to certain institutional investors, The Wall Street Journal reported on Sept. 3.

Following another delay on Bitcoin exchange-traded funds (ETFs), asset managers VanEck and SolidX plan to offer a limited version of their Bitcoin ETF to institutional investors.

VanEck, SolidX Bitcoin ETF launching Sept. 5

According to the report, the investment management firms are planning to start selling on Sept. 5 under the United States Securities and Exchange Commission’s (SEC) Rule 144A, which allows the sale of privately placed securities to “qualified institutional buyers.”

By using the SEC’s exemption, VanEck and Solid will be able to offer shares of their VanEck SolidX Bitcoin Trust to institutions such as banks and hedge funds, but not retail investors, the report notes.

Since VanEck and SolidX Partners requested the SEC to list a Bitcoin ETF in 2018, the regulator has delayed the decision on the matter multiple times, having approved zero Bitcoin ETFs to date.

On Aug. 12, the SEC again delayed its decision on three Bitcoin ETFs, including VanEck SolidX, Bitwise Asset Management and Wilshire Phoenix.

VanEck, SolidX to Offer Bitcoin ETF to Institutions via SEC Exemption: Report

While the U.S. Securities and Exchange Commission (SEC) has so far blocked a number of proposed bitcoin ETFs, two firms aim to launch a more limited option this week.

According to a report by the Wall Street Journal on Tuesday, VanEck Securities and SolidX Management – which have previously had a decision on their proposed bitcoin ETF postponed by the SEC – are taking an unusual route to bypass the regulatory hurdles. They will use an SEC exemption that will allow shares in their VanEck SolidX Bitcoin Trust to be offered to institutions such as hedge funds and banks, but not to retail investors.

The shares are reportedly planned to be sold from Thursday under the SEC’s Rule 144A, which allows privately placed securities to be traded among “qualified institutional buyers” with shorter holding periods and without the requirement to register with the SEC.

To date, the SEC has not approved any crypto ETF, although SEC Commissioner Robert Jackson said early in 2019 that he believes an ETF proposal will “eventually” meet the SEC’s standards.

On Aug. 12, the SEC delayed decisions on bitcoin ETF proposals by Bitwise Asset Management, VanEck/SolidX and Wilshire Phoenix, all of which hope to become the first to offer a crypto ETF in the U.S. Those decisions are now scheduled for later this month and in October.

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