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Blockforce Proposal for BTC Futures and Debt-based ETF Withdrawn after SEC Request

The United States Securities and Exchange Commission (SEC) has requested that a proposal for a crypto-based exchange traded fund (ETF) submitted Reality Shares ETF Trust be withdrawn. This news comes from a letter published on the sec.gov earlier today.

In the letter, the SEC notes that the withdrawal comes “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,” but gives little other detail.

Reality Shares ETF is owned by Blockforce, a crypto fintech firm, which according to its website, is a “U.S. based asset management firm that offers investment products in the equity, blockchain and cryptocurrency space through an array of public funds, private investment vehicles, and financial technology services.” The firm initially filed the proposal for an ETF that would invest in a portfolio that would include Bitcoin Futures as well as sovereign debt, just yesterday. However, as per the SEC’s request, Reality Shares withdrew the ETF.

In the original application, Reality Shares stated that the ETF was designed to “provide investment exposure to global currencies, both fiat and virtual currencies, that have been widely adopted for use (e.g., as store-of-value, international remittance, foreign-exchange trading) throughout the world.” With respect to the Bitcoin Futures, the ETF would have invested by way of a wholly owned Cayman Islands-registered subsidiary in futures that are currently trading on Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME). It is important to note these futures are settled in cash, and not Bitcoin itself.

Just last week, a leaked interview brought comments by SEC commissioner Robert J. Jackson, Jr. — he is one of five that oversee the SEC and the sole Democrat — to light, in which Jackson gave legitimate hope to the notion that a crypto ETF would gain SEC approval:

“Eventually, do I think someone will satisfy the standards we’ve laid out there?” Jackson said,
“I hope so, yes, and I think so.”