Public documents reveal that a second US financial services firm has withdrawn an effort to create exchange-traded futures (ETFs) tied to bitcoin.
In a letter dated October 5, an executive for Connecticut-based REX ETFs requested to pull back an amendment related to two previously proposed ETFs: the REX Bitcoin Strategy Fund and the REX Short Bitcoin Strategy ETF. The withdrawal is a notable one, given that the company said in August that it would seek to launch multiple investment products around cryptocurrencies.
The letter, penned by REX president J. Garrett Stevens, indicates that officials at the US Securities and Exchange Commission (SEC) don’t want to weigh in on such products in the absence of available derivatives contracts in which to invest.
“The Trust notes that on a call with the Staff, the Staff expressed the view that it is the Commission’s policy not to review a registration statement for a fund where the underlying instruments in which the fund intends to primarily invest are not yet available. The Staff requested that the Trust withdraw Amendment No. 47 until such time as the underlying instruments in which the Funds intend to invest (i.e., bitcoin futures contracts) become available for investment.”
Indeed, that language is virtually identical to statements included in a withdrawal letter from VanEck, a New York-based money manager that yanked its own bitcoin derivatives ETF bid late last month. Like REX, the firm clarified that it had not yet sold any securities tied to the ETF.
The new development suggests that continued efforts to create investment products around cryptocurrency markets will still face some degree of optimism from regulators like the SEC. This year has seen several notable rejections for bitcoin ETFs, including a still-in-review bid by investors Tyler and Cameron Winklevoss.
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