A closely-watched proposal to record a bitcoin exchange-traded fund on the Cboe BZX Alternate was withdrawn Wednesday – and the continuing partial shutdown of the U.S. authorities seems to be in charge.

As CoinDesk reported, the filing was “temporarily withdrawn”, based on VanEck VanEck director of digital asset technique Gabor Gurbacs. He additionally mentioned that “we’re actively working with regulators and main market contributors to construct acceptable market construction frameworks for a Bitcoin ETF and digital property generally.”

However Jan van Eck, the chief govt officer of VanEck, indicated on CNBC Wednesday that the shutdown’s affect on the Securities and Alternate Fee (SEC) hampered the method between regulators and people searching for the ETF’s approval. In line with van Eck, the discussions across the proposal – initially submitted final June and topic to subsequent approval delays – “needed to cease.”

Talking to CNBC’s Bob Pisani, van Eck defined:

“So, the SEC is affected by the shutdown…we had been engaged in discussions with the SEC in regards to the bitcoin-related points, custody, market manipulation, costs, and that needed to cease. And so, as a substitute of making an attempt to slide by way of or one thing, we simply had the applying pulled and we’ll re-file and re-engage within the discussions when the SEC will get going once more.”

Pressed by Pisani on whether or not the proposal would have been rejected anyway as a consequence of considerations about custody and bitcoin’s pricing, van Eck added that “we expect we even have fairly strong solutions to these [questions], however we simply want to actually exhibit it very, very clearly and convincingly to the regulators.”

“We had been making an attempt to try this however we clearly can’t have conferences whereas they’re shut down,” he added.

Jake Chervinsky, a lawyer with Kobre & Kim, instructed CoinDesk that, in his view, that “the ETF sponsors made the proper resolution to withdraw their proposal,” happening to notice that “the shutdown was the ultimate nail within the ETF’s coffin, for the reason that SEC doesn’t have sufficient workers members out there to assessment or approve any proposed rule adjustments proper now.”

“Withdrawing the proposal stops the SEC from issuing one other order saying the bitcoin markets aren’t prepared for an ETF. The choice to withdraw is a call to ‘stay to combat one other day’ – Jan Van Eck has mentioned he’ll re-file the proposal after the shutdown, so he most likely needed to keep away from setting a brand new precedent that will make it tougher to achieve the long run,” Chervinsky wrote in an e-mail.

The partial shutdown, which impacts a lot of authorities departments together with the U.S. Treasury (of which the SEC is a component), started on Dec. 22 following disagreements over the funding of a proposed wall on the U.S.-Mexico border sought by U.S. President Donald Trump. It’s the longest authorities shutdown in U.S. historical past.

Caught in the crossfire of the shutdown are a lot of different tasks within the crypto house, together with bitcoin futures platform Bakkt and crypto buying and selling platform ErisX, each of that are ready for the Commodity Futures Alternate Fee – an unbiased U.S. company that has additionally been affected by the funding lapse – for approvals.

Capitol Hill picture through Shutterstock

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