VanEck has been accused of plagiarism by blockchain firm and its former partner, SolidX.
SolidX, a former partner of investment firm VanEck has filed a lawsuit against the investment firm and accused VanEck of terminating their partnership in bad faith after “surreptitiously” working to launch a Bitcoin product based on SolidX’s work.
The global investment firm is facing a lawsuit from SolidX based on the contents of the Bitcoin ETF application which was filed for SEC approval two weeks ago.
SolidX on their own path have been working on an Exchange Traded Fund (ETF) for Bitcoin as early as 2015 but VanEck was the first firm to officially file for a Bitcoin ETF in 2017 under the Investment Company Act with the United States Securities and Exchange Commission. Although, both firms joined forces together in 2018 to work towards launching a Bitcoin ETF.
Both firms filed for a Bitcoin ETF in 2019 under the name VanEck/SolidX Bitcoin exchange trade fund to offer the product specifically to institutional investors only after exploiting a loophole in the United States Securities and Exchange Commission regulations.
VanEck withdrew the application in September 2019, and both companies subsequently parted ways in August 2020. SolidX describes this as a “bad faith termination” of their agreement.
VanEck filed a new approval for a Bitcoin ETF on December 31st with the SEC. Details of SolidX’s lawsuit states that VanEck was “surreptitiously working on its own Bitcoin product even while telling the world that it was ‘married’ to SolidX.”
The blockchain firm states that:
Using SolidX’s work and work product to compete with it is bad enough, but the registration statement VanEck filed would be called plagiarism in any other context: the structure of VanEck’s proposed Bitcoin ETF is substantively identical, or virtually so, to the structure for which SolidX sought SEC approval.
The plaintiff also alleges that “VanEck began announcing products that directly compete” within weeks of their terminated agreement, and that VanEck “could not have begun to issue [said products] without working against SolidX’s interests while still its business partner.”
In November 2020, VanEck launched a physically backed Bitcoin ETP on Germany’s Deutsche Börse Xetra market.