Posted on

ETF Tied to Bitcoin Futures Withdrawn After SEC Staff Request

Reality Shares ETF Trusts, a division of Blockforce Capital, is withdrawing an exchange-traded fund proposal that, if approved, would have included exposure to bitcoin futures.

The move comes just days after the proposal for the Reality Shares Blockforce Global Currency Strategy ETF was first submitted to the Securities and Exchange Commission (SEC). According to a note submitted to the SEC on Tuesday, the company withdrew its ETF proposal at the request of agency staffers.

A lawyer for Reality Shares confirmed the move when reached for comment by CoinDesk, stating:

“I can confirm that we did withdraw it and it was withdrawn because the staff are still taking the position that it’s not appropriate to file a registered 40 Act fund with cryptocurrency exposure at this time.”

The lawyer added that the Investment Company Act of 1940 – which the proposal was filed under – would have resulted in the proposal becoming automatically approved within 75 days, which is a specific aspect with which SEC staffers took issue.

Blockforce Capital could not be reached for comment.

The ETF proposal would have invested in a portfolio of sovereign debt instruments, alongside bitcoin futures products from the CME and Cboe exchanges. Reality Shares also left the door open to investing in other bitcoin futures products after the ETF began trading.

SEC emblem image via Shutterstock

Posted on

New Proposed ETF Would Encompass Bitcoin Futures Alongside Sovereign Debt Instruments

Reality Shares ETF Trust has filed a proposal for an exchange-traded-fund (ETF) that would invest in a portfolio which includes both sovereign debt instruments and Bitcoin futures.

Reality Shares ETF Trust — a unit of crypto-focused fintech firm Blockforce Capital — has filed a proposal for an exchange-traded-fund (ETF) that would invest in a portfolio which includes both sovereign debt instruments and Bitcoin (BTC) futures.The ETF filing was submitted to the United States Securities and Exchange Commission (SEC) Feb 11.

ETFs are securities that track a basket of assets proportionately represented in the fund’s shares. They are seen by some as a potential ‘holy grail’ that would herald the widespread adoption of cryptocurrencies as a regulated and passive investment instrument.

The proposed fund, to be listed on NYSE Arca, is designed to “provide investment exposure to global currencies, both fiat and virtual currencies, that have been widely adopted for use (e.g., as store-of-value, international remittance, foreign-exchange trading) throughout the world.”

In regard to BTC futures, the fund would initially — if successful — invest via a wholly owned Cayman Islands-registered subsidiary in the cash-settled BTC futures that are currently traded on CBOE Futures Exchange (CFE) and the Chicago Mercantile Exchange (CME).

The filing notes that CFE and CME BTC futures positions will thus be valued “at their respective futures cash settlement values as published […] at the close of each trading day.” It also proposes that the fund may evolve to invest in BTC futures that are traded on other exchanges in the future, but emphasizes that the fund “will not invest directly in [B]itcoin.” The filing adds:

“The Fund may gain most of its exposure to Bitcoin Futures through its investment in the Subsidiary, which invests in Bitcoin Futures. To the extent the Fund invests in such instruments directly, it will seek to restrict its income from such instruments to a maximum of 10 percent of its gross income […] to comply with certain qualifying income tests necessary for the Fund to qualify as a regulated investment company.”

In addition to Bitcoin futures, the proposed fund will also allocate larger investments to more traditional “high-quality, short-term sovereign debt instruments listed for trading on U.S. exchanges and denominated in U.S. dollar, euro, British pounds sterling, Japanese yen and Swiss francs.”

As previously reported, a separate Bitcoin-related ETF by investment firm VanEck and financial services company SolidX — for listing on CBOE’s BZX Equity Exchange — is currently making a circuitous route through various filings with the SEC.

With multiple actors — including the Winklevoss twins — either failing or continuing to await the SEC’s approval of their BTC-related ETFs, crypto entrepreneur and CNBC analyst Brian Kelly has recently claimed there is “no shot” for a crypto ETF to get the regulatory greenlight in 2019.

Posted on

NYSE Operator’s Long-Awaited Crypto Platform Bakkt Announces New Key Vacancies

Bakkt, the cryptocurrency platform owned by the Intercontinental Exchange, announced that they are hiring.

Bakkt, the cryptocurrency platform created by the operator of the New York Stock Exchange (NYSE), announced that they are hiring for a number of high-up positions in a tweet Jan. 22.

The Intercontinental Exchange’s (ICE) much-awaited crypto platform published a list of eight evidently new vacancies at the company, all of which are based in Atlanta and New York City. Some of the positions also have Hong Kong, Tokyo, San Francisco, London, Tel Aviv and Singapore listed as available locations.

The page specifies that the company is mostly trying to hire a number of developers, mostly at director and senior levels.

In particular, Bakkt is looking to hire a director of blockchain engineering, a blockchain developer, a director of security engineering, a senior full stack engineer, a mobile developer and a software development engineer in test. Also, the company is looking for a director of finance and at least one institutional sales member.

As Cointelegraph reported on the last day of December 2018, the ICE announced that it “expects to provide an updated launch timeline in early 2019 for the trading, clearing and warehousing” of its Bakkt Bitcoin (USD) Daily Futures Contracts.

On the same day, news broke that the platform had completed its first funding round, raising $182.5 million from 12 partners and investors.

In November, ex-Goldman Sachs partner and founder of crypto investment firm Galaxy Digital, Mike Novogratz, cited Bakkt’s pending launch as a possible catalyst for the crypto market’s next major price action.

Posted on

Launch of Bakkt Bitcoin Futures Market May Get Postponed Again

Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, is likely to delay the launch of Bakkt, its bitcoin futures trading and custody platform, a second time, CoinDesk has learned.

The company last set Jan. 24 as the launch date. However, ICE has yet to receive the necessary approvals from the U.S. Commodity Futures Trading Commission (CFTC), and at the pace the agency has been moving, it is unlikely that approvals will be secured in time to hit that target.

To be clear: That does not mean the CFTC won’t ultimately approve the plan. A person familiar with the agency’s inner workings said even a Jan. 30 launch was still plausible, meaning the delay could be just a matter of days.

Specifically, the CFTC must grant an exemption for Bakkt’s plan to custody bitcoin on behalf of its clients in its own “warehouse,” according to sources familiar with regulatory discussions of the plan. CFTC regulations normally require that customer funds be held by a bank, trust company or futures commission merchant (FCM).

The agency’s staff has finished reviewing Bakkt’s exemption request and passed it to the commission on Friday, one source said. Now the commissioners have to vote on whether to put out the proposal for public comment. After the 30-day comment period, the commissioners would likely take at least a couple days to read the comments, and then vote on the proposal itself.

But here’s the deal: Monday and Tuesday are now federal employee holidays. So unless these government officials decide to work on their days off, the earliest the commissioners are likely to vote on a public comment period and thereby start the 30-day clock is Wednesday, Dec. 26, the day after Christmas.

That already would push any final vote past Bakkt’s Jan. 24 launch target, even without taking into account the time needed to read the public comments. The possibility of a U.S. government shutdown threatens to further delay the process.

The exchange is likely to issue an updated launch target date, but not until next week, another source said.

This would be the second postponement. ICE had originally aimed to launch Bakkt in December, but last month it said that the “volume of interest” in the company and the “work required to get all the pieces in place” necessitated a delay.

Unlike the bitcoin futures offered by CME Group and Cboe, Bakkt’s will be physically settled, meaning actual bitcoin will change hands rather than cash when the contracts expire.

Photo via Stan Higgins for CoinDesk. From left: Michael J. Casey, the chairman of CoinDesk’s advisory board, interviews Bakkt CEO Kelly Loeffler and ICE chief Jeffrey Sprecher at Consensus: Invest 2018.

Posted on

Confirmed: Nasdaq’s Bitcoin Futures Will Launch in ‘First Half’ of 2019

The world’s second largest stock exchange Nasdaq has confirmed it plans to launch Bitcoin futures in the first half of 2019.

The world’s second largest stock exchange Nasdaq has confirmed it plans to launch Bitcoin futures in the first half of 2019, U.K. daily tabloid the Express reported Monday, Dec. 3.

As reported, two insider sources had already leaked the plans to Bloomberg in late November.

Yesterday’s confirmation from Joseph Christinat, vice president of Nasdaq’s media team, clarified the launch remains subject to approval from the U.S. Commodity Futures Trading Commission (CFTC), although reportedly “there’s been enough work put into this to make [the question of regulatory approval] academic […] we’re doing this, and it’s happening.”

Christinat told the Express that the stock market giant has been eyeing the crypto space “for years” and has been working on its Bitcoin (BTC) futures product for “most” of 2018. He added:

“We’ve put a hell of a lot of money and energy into delivering the ability to do this and we’ve been all over it for a long time — way before the market went into turmoil, and that will not affect the timing of this in any way. No. Period. We’re doing this no matter what.”

Chrisinat’s interview did not confirm whether Nasdaq’s Bitcoin futures contract will be cash-backed, or physically settled (i.e. with returns paid out in BTC rather than fiat currency).

While cash-settled Bitcoin futures contracts came to market on CBOE and CME Group as early as December 2017, the first physically-delivered Bitcoin futures are targeted for launch in January 2019 on Bakkt, the digital assets platform created by New York Stock Exchange (NYSE) operator, the Intercontinental Exchange (ICE).

In November 2017, Nasdaq had first indicated it would be launching BTC futures by mid-2018, but soon said it would be deferring rollout in order to create a “unique enough” offering.

As reported, Nasdaq’s planned futures contract will purportedly be the first of a set of “transparent, regulated and surveilled” digital assets products to be jointly launched as part of its recently-announced partnership with U.S. investment firm VanEck.

VanEck is also currently awaiting a final decision from the U.S. Securities and Exchange Commission (SEC) on its joint proposal for a physically-backed Bitcoin exchange-traded fund (ETF) together with blockchain software and financial services firm SolidX.