Hashdex Addresses SEC Concerns Over Bitcoin ETF Application

Hashdex Addresses SEC Concerns Over Bitcoin ETF Application

Asset manager Hashdex recently met with the United States Securities and Exchange Commission (SEC) to discuss concerns related to its application for the Hashdex Bitcoin Futures exchange-traded fund (ETF) to hold spot Bitcoin, according to an insider source. 

The meeting, held on October 13, brought together six SEC officials and representatives from Hashdex, NYSE Arca, Tidal Financial Group, and law firm K&L Gates.

At the heart of the discussion was Hashdex's unique approach to including spot Bitcoin in its ETF, which sets it apart from other applications. Unlike its counterparts, Hashdex does not have a surveillance-sharing agreement with cryptocurrency exchange Coinbase. Instead, the company's proposal centers on obtaining spot Bitcoin from physical exchanges within the Chicago Mercantile Exchange (CME) market. This approach makes the ETF entirely reliant on CME pricing for its transactions, as outlined in an SEC filing by NYSE Arca in late August.

During the meeting, Hashdex presented the mechanics of its plan, which involves trading and holding spot Bitcoin on the CME, an entity regulated by the Commodity Futures Trading Commission. They also highlighted their reliance on the Teucrium Order issued by the SEC, which asserts that the Bitcoin futures market has matured enough to support financial products seeking exposure to BTC.

The next steps in this process may involve the SEC requesting further information before the application's initial deadline on November 17, according to an individual familiar with the matter. This indicates that the SEC is actively evaluating Hashdex's proposal.

Hashdex, which boasts over $380 million in assets under management, operates 14 exchange-traded products (ETPs) across seven countries. Their innovative approach to spot Bitcoin within the ETF market represents an intriguing development in the ongoing discussions surrounding digital assets and financial products.

Also Read: Crypto Firms Push Boundaries: 221 Violations of UK's New Promo Rules

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