Arxnovum Investments, a Canadian investment manager, has filed a prospectus with the Ontario Securities Commission for a new Bitcoin (BTC) exchange-traded fund (ETF).
Based on the long-form prospectus, Arxnovum will be listing the new Bitcoin ETF on the Toronto Stock Exchange (TSX), although it’s still subject to the approval of the exchange and other legal requirements.
According to Arxnovum, there is no approval yet from the TSX, and there is no guarantee that the exchange will approve the listing.
Arxnovum also revealed that it wants to trade units of the Arxnovum Bitcoin ETF on the TSX against the U.S. dollar. Additionally, the company stated that the new proposed Bitcoin ETF could hold fixed income securities, cash, or equivalents.
Gemini to act as a sub-custodian
Crypto exchange and custody firm Gemini announced that the exchange would offer full support to the new Bitcoin ETF. The exchange stated that it would be the sub-custodian for the assets issued outside Canada.
Arxnovum has also confirmed Gemini’s statement. “Gemini Trust Company is the sub-custodian of the bitcoin held by the Bitcoin ETF,” the company stated.
Gemini is a certified SubCustodian registered with the State Department of Financial Services in New York. According to the statement, the exchange will be holding the Bitcoin ETF for those assets held outside Canada.
New ETF to be listed as BIT.U
The ETF will be listed as “BIT.U” on the Toronto Stock Exchange, subject to approval by the exchange.
Chief Executive Officer of Arxnovum Investments, Shaun Cumby, is the manager filing the ETF application. Cumby was previously the chief information officer at Canada-based digital asset manager 3iq Corp, which launched the world’s first regulated Bitcoin fund, TSX: QBTC.U. Gemini also provided cryptocurrency custodian services for the QBTC.U fund.
Arxnovum also planned to make the new Bitcoin ETF trade on the Chicago Mercantile Exchange and other commodity futures exchanges in the US.
According to the prospectus information, the Bitcoin ETF will offer investors exposure to invest in Bitcoin and get first-hand information on daily price movements.
The crypto community has been eagerly anticipating Bitcoin ETF's for some years now. In 2018, the US Securities and Exchange Commission (SEC) refused a Bitcoin ETF application from the Winklevoss twins.
In a January report, JPMorgan Chase revealed that introducing a Bitcoin ETF would not be favorable for Bitcoin’s price. The same month, the first company to file for a Bitcoin ETF, VanEck, faced a lawsuit from SolidX, its former partner.
Bitcoin ETF is considered “high risk”
The prospectus also added that investments in Bitcoin ETF are considered a “high risk” investment, and there is no guarantee that TSX will approve its application for listing.
No firm has been able to get approval for Bitcoin ETF's in the US, as the investment is hazardous, especially in this extremely volatile market. It remains seen whether Arxnovum will get the Ontario Securities Commission's nod for the first Bitcoin ETF in Canada.