VanEck Fined Nearly $2 Million by SEC Over Lack of Disclosure in ETF Launch

TL;DR
1.SEC Finds VanEck's Lack of Disclosure Regarding BUZZ ETF Influencer Participation.
2.VanEck Reduces HODL Bitcoin ETF Fee Amidst Competition.

VanEck, a prominent issuer of Bitcoin Exchange Traded Funds (ETFs), has settled with the US Securities and Exchange Commission (SEC) by agreeing to pay a civil penalty of $1.75 million. This penalty stems from charges related to VanEck's failure to disclose the involvement of a social media influencer in the launch of its Social Sentiment ETF.

SEC Findings and Settlement

The SEC's investigation found that VanEck launched the VanEck Social Sentiment ETF (BUZZ) in March 2021, aiming to track an index based on positive insights from social media and other data. However, the SEC discovered that VanEck failed to disclose the influencer's planned involvement and the fee structure to the ETF's board when seeking approval for the fund launch and management fee.

This lack of disclosure limited the board's ability to evaluate the economic impact of the influencer's participation, hindering their decision-making process regarding VanEck's advisory contract for the fund. Consequently, VanEck has consented to the SEC's order without admitting or denying the findings, agreeing to the civil penalty and implementing measures to prevent similar disclosure failures.

Impact on Bitcoin Spot ETF Market

Amidst fee reductions and increasing competition in the spot Bitcoin ETF market, VanEck announced a fee reduction for its HODL Bitcoin ETF, lowering the management fee from 0.25% to 0.20% starting February 21st. This move reflects the ongoing fee wars among ETF issuers.

Analytics from SoSo Value data show significant investor interest in the Bitcoin spot ETF market, with total net inflows of $477 million on February 15th, marking the fifteenth consecutive trading day of net inflows. Notably, BlackRock's IBIT emerged as a leader in net inflows, recording a daily net inflow of $330 million on February 15th, reinforcing its position as a significant player in the market.

Bitcoin ETF market data as of February 15. Source:SoSo Value

Conclusion:VanEck SEC Settlement: $1.75M Penalty

VanEck settles with the SEC, agreeing to pay a $1.75 million civil penalty for failing to disclose a social media influencer's involvement in its ETF launch. Fee reductions in the Bitcoin spot ETF market reflect ongoing competition among issuers, with BlackRock's IBIT leading in net inflows.