VanEck, a top investment management firm, has been fighting to get the first crack at a Bitcoin exchange-traded fund (ETF) for years now. With a new set of hands helming the Securities and Exchange Commission (SEC), the firm is giving its pursuit another try.
Switching Things Up
Earlier this week, the New York-based investment firm filed for a new Bitcoin ETF with the SEC. Dubbed the Digital Assets ETF, the financial product is designed to monitor the performance of the Global Digital Assets Equity Index.
Launched in 2018 by VanEck’s subsidiary MV Index Solutions, the Digital Assets Equity Index gets equities prices from three over-the-counter (OTC) trading desks – Cumberland, Genesis Trading, and Circle Trade.
It provides a reliable pricing index for institutional investment tools like ETFs while also allowing investors to execute institutional size trades more transparently.
Speaking about its new product, VanEck explained that the Digital Assets ETF would invest at least 80 percent of its assets in securities that make up its benchmark index. The index itself tracks digital asset companies’ performances – firms that operate crypto exchanges, payment gateways, mining operations, technology services, and more to the crypto industry and others.
Prospective companies would need to get at least half of their revenues from digital asset projects, or projects that could potentially generate such revenues. VanEck’s filing added:
“Companies with less than 50% of their revenues from the global digital assets segment, including semiconductor and online money transfer companies, may be added to the Index to reach a minimum component number.”
A Lingering Lawsuit
The new ETF attempt will be the latest in a long line of trials from VanEck. Many of its previous attempts were either blocked by the SEC or withdrawn due to frustration with the agency. However, the SEC is undergoing a shakeup, with former Chairman Jay Clayton vacating his position at the turn of the year and reports of a pro-crypto candidate set to replace him.
Now, the investment management firm appears to fancy its chances at another go. Still, this trial isn’t without its controversies.
Weeks back, SolidX Partners, a software development firm with ties to VanEck, sued the company for violating their partnership in a recent ETF filing. VanEck and SolidX had partnered to apply for the VanEck SolidX Bitcoin Trust, a Bitcoin ETF, back in 2018 after the former’s initial failures. Still, their efforts didn’t mean much as the SEC remained a sound barrier between them and their aspirations.
The partners eventually aerated in August 2020, and VanEck immediately announced that it would file a new ETF – presumably, the Digital Assets ETF – on the last day of the year.
In its suit, SolidX Partners alleged that VanEck had taken parts of its work in ETFs and repackaged them into its filing. The software development firm added that VanEck worked on its ETF while the two were still partners. It added that the latter’s ETF filing structure was similar to that of the VanEck SolidX Bitcoin Trust, and that VanEck’s actions can easily be seen as plagiarism.