Major Futures Exchange CBOE Files for Bitcoin ETF, Increasing Probability of Approval

2018/7/12 10:42:48

Once a bitcoin ETF gets approved, an influx of new capital from retail investors in the traditional finance market will arrive in the cryptocurrency sector, pushing the value and the volume of major digital assets. 

 


By Joseph Young for CCN, JULY 09, 2018 20:47

 

The Chicago Board Options Exchange, the world’s largest futures exchange, has filed for a bitcoin ETF with the US Securities and Exchange Commission (SEC), to enable investors in the public market to trade bitcoin.

 

Bitcoin-Only ETF

 

The official document filed by CBOE with the SEC emphasized that the Trust, referring to CBOE, will only invest in bitcoin on behalf of investors. Essentially, CBOE will facilitate over-the-counter (OTC) trades amongst accredited investors in the traditional finance market, while insuring funds in bitcoin acquired by investors.

 

The document read:

“According to the Registration Statement, the Trust will invest in bitcoin only. The activities of the Trust are limited to: issuing Baskets in exchange for the cash and/or bitcoin deposited with the Cash Custodian or Trust, respectively, as consideration; purchasing bitcoin from various exchanges and in OTC transactions; delivering cash and/or bitcoin in exchange for Baskets surrendered for redemption; maintaining insurance coverage for the bitcoin held by the Trust; and securing the bitcoin held by the Trust.”

 

As of July, CBOE is one of the three financial institutions alongside SolidX and Gemini (Winklevoss twins) to file for a bitcoin ETF with the US SEC. The other ETFs were rejected by the SEC in 2017 due to lack of overseas regulations and price manipulation. At the time, leading cryptocurrency markets like Japan and South Korea did not have practical regulatory frameworks and policies in place to govern the cryptocurrency market.

“The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation. But this creates a chicken and egg problem. How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?” said CoinCenter executive director Jerry Brito at the time.

Since then, the global cryptocurrency industry has drastically changed in almost every aspect. The Japanese government has remained at the forefront of global cryptocurrency regulation, leading the G20 to unify regulations for crypto exchanges and investors.

Financial authorities of South Korea, who previously were reluctant towards regulating the cryptocurrency market because they feared local investors would recognize it as a move to legitimize the crypto exchange market, also finalized its plans to acknowledge crypto trading platforms as fully regulated financial institutions.

 

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https://www.ccn.com/major-futures-exch ... -probability-of-approval/

 

 

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