The Connecticut-based company, REX, gave up the idea of creating a cryptocurrency exchange-traded fund (ETF). As noted in a letter sent to the US Securities and Exchange Commission (SEC), the company withdrew applications for the opening of exchange funds Rex Bitcoin Strategy and Rex Short Bitcoin Strategy.
The reason for the decision is the same as in the recent case with the New-York based VanEck investment fund - the financial regulator does not want to examine such applications until Bitcoin-based financial instruments appear on the market.
J. Garrett Stevens, the president of REX, writes in the letter addressed to the SEC:
"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. In response to the Staff’s request, we are requesting withdrawal of Amendment No. 47."
According to experts, if the regulator does not reach a positive solution in the near future, many large companies would withdraw their applications as well, which would have a strong impact on the cryptocurrency market as a whole.
In 2017, the US Securities Exchange Commission declined more Bitcoin-based ETF applications, like the ones from SolidX and Winklevoss brother’s attempt to list an exchange-traded fund on the Bats BZX Exchange. On the other hand, the SEC later accepted a petition that proposed the commission to review its determination to decline the ETF advanced by Cameron and Tyler Winklevoss.
In September, Barry Silbert’s Grayscale Investments also withdrew the application for the opening of a Bitcoin-ETF.
Earlier, the top manager of the investment company BlackRock, Mark Wiedman, said that the creation of cryptocurrency ETFs was pointless.
“I do not quite get the point of a Bitcoin-ETF because access to these products is limited. If Bitcoin is ever successful (I would not recommend it), why would you need an ETF to access it?” Wiedman said in a Bloomberg interview.