SolidX is taking VanEck to court over its recent Bitcoin ETF filing. The company claims that VanEck had rehashed parts of their initial ETF application, essentially working against its interest while they were partners.
For so long, Bitcoin exchange-traded funds (ETF) were heralded as an innovative means of providing institutions with adequate exposure to Bitcoin. However, they’re yet to receive approval from regulators in the United States. With the battle for approval raging on, it appears that two entities who were partners at one time would have to slug it out in court.
A Timeline of VanEck and SolidX Partnership
Blockchain firm SolidX Partners filed a lawsuit against investment manager and former partner VanEck, over plagiarism in its recent Bitcoin ETF filing. SolidX is accusing VanEck of lifting sections from their previous Bitcoin product and repackaging them into its most recent ETF filing.
VanEck was the first to file for a Bitcoin ETF in 2017. Crypto-based financial instruments were still a novelty at the time. The asset manager felt an ETF could shield institutions from much of the volatility of the crypto market. It eventually partnered with SolidX on the ETF filing a year later, leveraging on the latter’s experience with crypto.
Sadly, the companies’ effort was kiboshed by the Securities and Exchange Commission (SEC), which shot it down on claims that their ETF filing had shown insufficient investor protection levels. VanEck and SolidX tried for a second application, but consistent delays from the SEC frustrated them, and they withdrew the ETF application in September 2019.
The partners went their separate ways in August 2020. VanEck announced the filing for a new ETF in December 2020 and all hell broke loose.
So Much for Being Partners
In its filing, SolidX alleges that VanEck had been working on its Bitcoin ETF while claiming to the industry that they were partners. It added that VanEck’s ETF filing structure was considerably identical to that of its own and that the investment firm’s actions would be termed plagiarism in any other context.
There are some similarities in how both products are set up. Like the VanEck SolidX Bitcoin Trust, the new VanEck Bitcoin Trust plans to list on the Chicago Board Options Exchange (CBOE) BZX Exchange Inc. The fund will also be tied to MVIS, a VanEck subsidiary index that will calculate Bitcoin’s real-time price based on executable bids and asks from over-the-counter (OTC) crypto markets – as opposed to crypto exchanges.
The investment management firm appears to be working on the assumption that a new administration at the SEC will be more favorable to Bitcoin ETFs. In November, former agency Chairman Jay Clayton announced his exit from the regulator, setting the stage for a possible pro-crypto head honcho to take the wheels.
SolidX added that VanEck had been announcing new products within weeks of their agreement’s termination. Essentially, the only way the defendant would have been able to develop so many products in the pipeline would have been if it was working against SolidX’s interests while they were supposedly partners.
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