SEC Request Reality Shares To Withdraw Partial-Bitcoin ETF proposal – On Next Day of Filing

Up until now, SEC hasn’t approved any ETF proposal – including those of Winklevoss and VanEck’s. This time too, the recently submitted ‘Reality Shares ETF Trust’ have been withdrawing at the request of SEC Agency.

Why SEC Forces Firm To Withdraw ETF?

SEC staff requested to withdraw the ETF proposal submitted by a California based investment company, Reality Shares. Consequent to the request, Reality Shares have withdrawn the application and a lawyer from the company have confirmed the same. Moreover, the lawyer explained the reason behind the move as follows;

“I can confirm that we did withdraw it and it was withdrawn because the staff is still taking the position that it’s not appropriate to file a registered 40 Act fund with cryptocurrency exposure at this time.”

It is important to note that the firm had submitted a registration form for ETF filing on February 11, 2019, and received an alert from SEC to withdraw on February 12, 2019. On part of SEC, sources mentioned the statement from the Dalia Blass, the SEC Director of Investment Management wherein she describes that the regulators have ‘forbade fund sponsors’ that intends to register crypto investment product under the 40Act. Moreover, it states that such funds shouldn’t use rule 485(a).

Means that the Reality Share’s proposal did fall under the ‘Investment Management (IM) due to the 40 Act filing’. The attorney familiar to SEC adds that;

“IM reviews 485(a) filings and provides comments, but unlike filings for non-investment companies on Form S-1 … a 485(a) filing goes effective without action from IM,”

However SEC is always reluctant to press on green signal for ETF but in this case, if it would be approved, it would have been hosted by NYSE Arca, owned by Intercontinental Exchange(ICE). Further, to mention, Reality Shares ETF Trust filing is not as similar to VanEck or other proposals, rather they filed a partial bitcoin ETF (Sovereignty debt instruments along with Bitcoin futures).

Stay tuned with Coingape to get upcoming move of SEC or the comment from Reality Shares!

The post SEC Request Reality Shares To Withdraw Partial-Bitcoin ETF proposal – On Next Day of Filing appeared first on Coingape.

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