ETF Connected to Bitcoin Futures Withdrawn After Request From SEC Staff

Reality Shares ETF Trust have received a withdrawal request, for their proposed exchange traded fund (ETF), from the U.S. Securities and Exchange Commission, the latter published on Feb. 12.

The proposal for an ETF was initially filed by the Reality Shares ETF Trust, which is part of the fintech company Blockforce Capital, and would have allowed the company to invest in a portfolio that encompasses both Bitcoin futures and sovereign debt instruments. The request for withdrawal of said ETF was published only a day after the actual proposal.

The document further reveals that the withdrawal was issued “at the request of the Staff of the U.S. Securities and Exchange Commission. No securities have been sold in connection with the offering of the fund”.

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According to Reality Shares ETF Trust, the proposal was designed in such a way that it would have allowed investment exposure to currencies, virtual and fiat, that have been widely adopted for use (e.g., as store-of-value, international remittance, foreign-exchange trading) throughout the world.

The proposal was filed under the Investment Company Act of 1940, which would approve it automatically 75 days after the filling. In an SEC Staff Letter from last year, Dalia Blass, SEC Director of Investment Management, pointed out that the agency had questions concerning how funds holding cryptocurrencies would satisfy the requirements of the 1940 Act and its rules.

Until these questions are addressed satisfactorily, the agency will take appropriate actions against such fillings.

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