Eight times since 2013, the U.S. Securities and Exchange Commission has repeatedly refused to approve applications for a cryptocurrency-linked exchange traded fund (ETF).  See here  and here.  Time and again, the SEC said that the applicants were unable to persuade the Commission that the Bitcoin market was sufficiently resistant to market manipulation.  Another common theme was the dissent of Hester Pierce (affectionately known as “Crypto Mom), who said in January 2020, for example:

This order is the latest in a long string of disapproval orders that the Commission has issued regarding bitcoin-related products. This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.

On February 12, 2021, Purpose Investments Inc. said Canadian securities regulators (the Ontario Securities Commission) has approved the launch of Purpose Bitcoin ETF, making it the first to gain regulatory approval in North America.  Purpose Investments said: “The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency.”

The Fact Sheet for the ETF is available here.  It will trade on the Toronto Stock Exchange under the ticker signal BTCC.

Despite pushback from the SEC, demand for bitcoin-based investments has soared during bitcoin’s 2021 rally. The Grayscale Bitcoin Trust that follows bitcoin has gained 272% in the last twelve months.  Currently, in the U.S., VanEck Associates Corp. and Bitwise Asset Management have pending ETF filings before the SEC.  Perhaps the approval in Canada will lead to a different result this time in the U.S.. Gary Gensler, former chair of the Commodity Futures Trading Commission, was named chair of the SEC last month by U.S. President Joe Biden. 


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.