The United States Securities and Exchange Commission (SEC) has ordered two funds to remove the term “blockchain” from their company monikers, ostensibly so as to avoid the misleading of investors, Bloomberg reports.
The two funds, Amplify and Reality Shares, still contain blockchain references in their names, BLOK and BLCN respectively, but Bloomberg’s report indicates that over one-third of ETFs were compelled to change their names during the filing process, including “one fund that initially included blockchain in its name is now described as a ‘transformational data sharing’ ETF.”
The SEC has been looking into the naming conventions of Exchange-Traded Funds (ETFs), which have been growing in number over the past 12 months. Speaking to Bloomberg, J. Garrett Stevens, CEO of Exchange Traded Concepts, said,
We get questions more than we used to where we have to be able to defend our name. Now almost all names, they’ll come back and say ‘Can you justify, give us your explanation on why this name is OK?
The change has its roots in the Investment Company Act of 1940, a law that prohibited asset issuers from employing “materially deceptive or misleading” names.
Bitcoin ETF Approval Soon?
The SEC has made it a priority to examine cryptocurrencies in 2019, and certainly there has been a slew of ETF applications sent to the regulatory body, which has yet to formally approve of one. Some officials have said that it is a matter of when, not if, and others like Commissioner Hester Peirce have spoken positively of the potential of bitcoin and blockchain in general.