SEC Extended Reviews of Two Bitcoin Fund Proposals

The U.S. Securities and Exchange Commission on March 29, 2019 extended its review of two proposed exchange rule changes for funds designed to hold bitcoin. One filing concerned the Bitwise Bitcoin ETF Trust on NYSE Arca; the other covered SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust on Cboe BZX.

The parallel notices kept two prominent attempts to place bitcoin exposure on national securities exchanges under consideration. They did not approve either product, reject either proposal or authorize trading. The verified development was procedural but consequential: the SEC used its statutory authority to take more time before choosing whether to approve, disapprove or open a more extensive proceeding.

Two proposals, two new deadlines

NYSE Arca filed its proposed Bitwise rule change on January 28, 2019. The SEC published notice in the Federal Register on February 15 under file SR-NYSEArca-2019-01. The original 45-day review period would have ended on April 1. Release No. 34-85461 designated May 16 as the new deadline for Commission action.

Cboe BZX filed the VanEck SolidX proposal on January 30. The SEC published that notice on February 20 under file SR-CboeBZX-2019-004. Its initial review period would have ended on April 6. Release No. 34-85475 moved the action date to May 21.

These dates came directly from the SEC’s March 29 notices. The notices were published in the Federal Register on April 4, but both carry an SEC issue date of March 29. Each stated that the longer period was appropriate so the Commission would have sufficient time to consider the proposed rule change.

The two filings were separate. NYSE Arca sought to list shares of the Bitwise Bitcoin ETF Trust under its rule for commodity-based trust shares. Cboe BZX sought to list SolidX Bitcoin Shares under its corresponding commodity-trust rule. Grouping them together describes the agency’s same-day action; it does not imply that their sponsors, structures or regulatory records were identical.

Delay was not a substantive ruling

The March 29 notices offered no finding that the bitcoin market satisfied the Exchange Act standards governing fraud prevention, manipulation safeguards or investor protection. They also did not reject the applicants’ evidence. The Commission merely preserved its available procedural choices through the revised deadlines.

That distinction mattered because contemporaneous coverage commonly described the action as a delay in approving bitcoin exchange-traded funds. More precisely, the SEC was reviewing exchange proposals to change listing rules. A fund could not begin national-exchange trading solely because a sponsor had proposed it; the relevant exchange rule change also required Commission approval.

The Bitwise review had attracted particular attention after representatives presented SEC staff with an analysis arguing that most reported bitcoin trading volume was suspect. A separate Coinburn reconstruction covers the public emergence of that analysis on March 22. The March 29 extension did not endorse its methodology or conclusions, and no inference about the Commission’s view can be drawn from the additional review time.

No bitcoin price or trading-volume figure is used here. Fragmented, continuously operating cryptocurrency markets did not have a single official March 29 close, and the regulatory notices provide no evidence that the extensions caused a measurable market move.

Later context

The SEC opened formal proceedings on the Bitwise proposal on May 14, 2019 and on the VanEck SolidX proposal on May 20. Those later actions confirm that neither March 29 extension resolved the applications. They should not be projected backward as outcomes known when the two review periods were extended.