The Chicago Board Options Exchange, abbreviated CBOE, has filed an application for a bitcoin-based ETF enlisted to trade BTC shares supported by the Vaneck Solidx Bitcoin Trust (“the Trust”). A release published by the SEC states that the application was submitted on the 20th of June.
The SEC seeks public feedback concerning the application. They released a statement that “Interested persons are invited to submit written data, views, and arguments” on the proposed ETF.
“The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4), which governs the listing and trading of Commodity-Based Trust Shares on the Exchange. Solidx Management LLC is the sponsor of the Trust (Sponsor). The Trust will be responsible for custody of the Trust’s bitcoin. Delaware Trust Company is the trustee (Trustee). The Bank of New York Mellon will be the administrator (Administrator), transfer agent (Transfer Agent) and the custodian, with respect to cash, (Cash Custodian) of the Trust. Foreside Fund Services, LLC will be the marketing agent (Marketing Agent) in connection with the creation and redemption of ‘Baskets’ of Shares,” the SEC release states.
Each of the fund’s shares “will represent a fractional undivided beneficial interest in the Trust’s net assets. The Trust’s assets will consist of bitcoin held […] utilizing a secure process […] The Trust will not normally hold cash or any other assets, but may hold a very limited amount of cash in connection with the creation and redemption of Baskets and to pay Trust expenses.”
The registration statement states, “the Trust will issue and redeem ‘Baskets’, each equal to a block of 5 Shares” to “Authorized Participants” exclusively. Each share “currently represents approximately 25 bitcoin.”
The objective of the Trust regarding their investment is for “the Shares to reflect the performance of the price of bitcoin, less the expenses of the Trust’s operations. The Trust intends to achieve this objective by investing substantially all of its assets in bitcoin traded primarily in the over-the-counter (OTC) markets, though the Trust may also invest in bitcoin traded on domestic and international bitcoin exchanges, depending on liquidity and otherwise at the Trust’s discretion.”
The MVBTCO index will determine the prices that the fund will track. The index “calculates the intra-day price of bitcoin every 15 seconds, including the closing price as of 4:00 p.m. E.T.” The SEC release states that “The bitcoin OTC platforms included in the MVBTCO are U.S.-based entities. These platforms are well-established institutions that comply with AML and KYC regulatory requirements with respect to trading counterparties and include entities that are regulated by the SEC and FINRA as registered broker-dealers and affiliates of broker-dealers.”