The U.S. Securities and Exchange Commission (SEC) announced on Thursday that has begun a formal review process for the physically-backed bitcoin ETF proposed by VanEck and SolidX.

According to the order dated Sept. 20 and published on the SEC’s website, the regulatory agency will now consider whether, pursuant to federal securities guidelines, it should approve the fund — the VanEck Solidx Bitcoin Trust — for listing on CBOE BZX Exchange.

From the order:

“Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved.”

The order comes as somewhat of a surprise. CBOE first filed to list shares of the VanEck Solidx Bitcoin Trust in June, and in August the SEC postponed ruling on the application, setting a new deadline of Sept. 30. Many analysts, including Canadian investment firm Canaccord, speculated that the SEC would likely delay ruling on the fund once more, until March 2019.

Unlike most proposed bitcoin ETFs, the proposed VanEck-SolidX fund would hold actual BTC — called “physical bitcoin” — rather than cryptocurrency futures contracts. The fund would also “maintain comprehensive insurance underwritten by various insurance carriers” to “protect investors against loss or theft of the Trust’s bitcoin.”

Although the fund would technically be available to retail buyers, each share would represent 25 BTC (more than $160,000 at the current exchange rate), so practically speaking it would likely be restricted primarily to wealthy investors and institutions. That’s by design, as the SEC has been especially cautious about making investment products that it considers risky more accessible to unsophisticated buyers.

Nevertheless, prospects for the ETF’s approval remain bearish, as the SEC has thus far struck down every bitcoin ETF application on which it has ruled. SEC Commissioner Hester Peirce has in recent days called for regulators to be more open to cryptocurrency products, and she issued a formal dissent after the commission ruled against a Winklevoss-led ETF effort. However, thus far she has remained a minority voice on the commission.

The SEC said that it received more than 1,400 comments on the proposed rule change.

Read the full order below:

VanEck SolidX Bitcoin Trust Order by CCN on Scribd

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