The post Why the SEC Fined Bitcoin ETF Issuer $1.75 Million appeared on BitcoinEthereumNews.com.

The US Securities and Exchange Commission (SEC) has imposed a $1.75 million fine on VanEck, a Bitcoin exchange-traded fund (ETF) issuer, citing disclosure failures. According to the SEC, VanEck neglected to inform the board overseeing its Social Sentiment ETF (BUZZ) about a prominent social media influencer’s involvement. VanEck Did Not Admit Nor Deny SEC Findings The SEC did not mention the influencer’s identity in its statement. However, Bloomberg’s analyst Eric Balchunas explained that Dave Portnoy, Barstool Sports’s founder, was the person involved. “[VanEck] didn’t disclose to fund board that ‘well-known and controversial’ social media influencer Dave Portnoy was getting paid by the index company on sliding scale in order to help incentivize promotion of their ETF,” Balchunas said. VanEck refrained from either admitting or denying the SEC’s findings. Still, the firm consented to a cease-and-desist order, a censure, and a substantial monetary penalty. Andrew Dean, co-chief of the Enforcement Division’s Asset Management Unit at the SEC, stressed the critical importance of accurate disclosures for fund boards, particularly regarding matters that could potentially impact advisory contracts. “Van Eck Associates’ disclosure failures concerning this high-profile fund launch limited the board’s ability to consider the economic impact of the licensing arrangement and the involvement of a prominent social media influencer as it evaluated Van Eck Associates’ advisory contract for the fund,” Dean added. VanEck’s BUZZ ETF Performance. Source: VanEck VanEck’s BUZZ ETF is designed to track a basket of 76 large-cap US stocks that exhibit a notable degree of positive investor sentiment. It is influenced by various online content sources such as social media platforms, news articles, and blog posts. Notable companies included in this ETF are Coinbase, Microsoft, Tesla, Alphabet, AMD, Nvidia, Meta, Apple, and MicroStrategy. Revised Spot Ethereum ETF Application Despite the recent regulatory setback, VanEck amended its application for a…

---

Filed under: News - @ February 17, 2024 11:14 am