VanEck Settles with SEC Over Failure to Disclose Involvement of Social Media Influencer
VanEck, a registered investment adviser and issuer of Bitcoin Exchange Traded Funds (ETFs), has reached a settlement with the US Securities and Exchange Commission (SEC). The company has agreed to pay a civil penalty of $1.75 million for failing to disclose the involvement of a social media influencer in the launch of its Social Sentiment ETF.
SEC Finds VanEck Guilty
According to the SEC’s order, VanEck launched the VanEck Social Sentiment ETF (BUZZ) in March 2021. The ETF aimed to track an index based on positive insights from social media and other data. However, VanEck failed to disclose the planned involvement of a well-known and controversial social media influencer and the fee structure linked to the fund’s size.
This lack of disclosure limited the board’s ability to evaluate the economic impact of the licensing arrangement and influencer’s participation as they considered VanEck’s advisory contract for the fund. VanEck consented to the SEC’s findings without admitting or denying them.
Fee Cut For HODL Bitcoin ETF
In light of intensifying competition in the spot Bitcoin ETF market, VanEck announced a fee reduction for its new spot Bitcoin ETF, HODL. The management fee will be lowered from 0.25% to 0.20%, reflecting ongoing fee wars among ETF issuers.
Analytics firm SoSo Value data shows that the spot Bitcoin ETF market continues to attract significant investor interest. On February 15th, there was a total net inflow of $477 million, marking fifteen consecutive trading days of net inflows. BlackRock’s IBIT emerged as the leader in net inflows, with a daily net inflow of $330 million.
Overall, the settlement with the SEC highlights the importance of accurate disclosures by advisers and serves as a reminder for companies to be transparent about their business arrangements to ensure fair decision-making.
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