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SolidX Seeking to List Bitcoin ETF on New York Stock Exchange

(@pete_rizzo_) | Published on July 12, 2016 at 13:46 BST
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A second firm has filed with the US Securities and Exchange Commission (SEC) in a bid to launch an exchange-traded fund (ETF) that would offer exposure to bitcoin.

Blockchain technology firm SolidX announced today it has filed a registration statement with the SEC to launch the SolidX Bitcoin Trust. According to the S-1 filing, the trust will issue shares that represent units of ownership in the trust, with SolidX Management LLC acting as the custodian of bitcoin held by the trust. Bank of New York Mellon, in turn, will act as the administrator of the trust and custodian for its cash holdings.

Shares in the trust will be issued in blocks of 10,000 shares to authorized participants, described in the filing as registered broker-dealers who would create and redeem the blocks in baskets, for the delivery of cash (or bitcoins). Bitcoins in the trust, the filing said, would either be sourced on bitcoin exchanges or in over-the-counter (OTC) transactions.

According to the company, the trust will be managed on the NYSE under the ticker symbol "XBTC". Prices will be quoted using the TradeBlock XBX Index.

As noted by industry advocacy group Coin Center, a notable difference between the SolidX Bitcoin Trust and the competing Winklevoss Bitcoin Trust is that the former has secured insurance that would cover the loss or theft of bitcoins in the trust.

"The Trust maintains three separate levels of insurance coverage to cover the loss of bitcoin held by the Trust: crime, excess crime and excess vault," the filing reads.

In its most recent 29th June filing with the SEC, Winklevoss Bitcoin Trust sponsor Digital Asset Services, LLC indicated it will not insure bitcoins it holds in conjunction with the investment vehicle.

Founded in 2014, SolidX raised $3m from investors including Liberty City Ventures, Red Sea Ventures and Red Swan Ventures with the goal of offering 'total return swaps' to large institutional bitcoin investors.

As such, in the filing, SolidX stated it believes its latest offering is better suited for institutional investors than direct bitcoin purchases:

"The sponsor believes that shareholders will be able to more effectively implement strategic and tactical asset allocation strategies that use bitcoin by investing in the shares than by purchasing, holding and trading bitcoin directly."

SolidX declined to offer additional comment.

Investor image via Shutterstock

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