In a significant move to meet regulatory standards, Chicago Board Options Exchange (Cboe) has refiled five spot Bitcoin exchange-traded fund (ETF) applications, amending them to include surveillance-sharing agreements with Coinbase, a leading cryptocurrency platform. The ETFs in question are from Fidelity, Invesco, VanEck, WisdomTree, and a joint fund by ARK Invest and 21Shares.
Cboe stated that it had “reached an agreement on terms with Coinbase” to enter into the surveillance-sharing agreements, which were settled on June 21. The initial filings for the ETFs stated that the parties were “expecting to enter” an agreement prior to potentially offering the ETFs.
A surveillance-sharing agreement is a cooperative arrangement between entities to share information for the purpose of detecting and preventing fraudulent and manipulative practices. In the context of these ETF applications, the agreement would involve sharing trading data between the ETF issuers and Coinbase. This is intended to provide a level of oversight and transparency to the underlying Bitcoin markets.
The inclusion of surveillance-sharing agreements in the filings is seen as an effort to meet the U.S. Securities and Exchange Commission’s (SEC) standards aimed at preventing fraudulent conduct and protecting investors. The SEC has stated that an exchange needs a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference Bitcoin assets.
The refiling of these ETF applications with the inclusion of surveillance-sharing agreements has sparked optimism in the market. Following the announcement of Cboe’s refilings, Coinbase shares surged nearly 10% on June 11, reaching their highest price since August 16, per Google Finance data.
However, it’s important to note that Coinbase is currently engaged in a legal battle with the SEC. The regulator has accused the cryptocurrency platform of offering cryptocurrencies that it considers to be unregistered securities. Coinbase has refuted these allegations, arguing that the crypto assets trading on its platform are not “investment contracts,” and thus not securities.
In related news, Nasdaq also refiled its application to list BlackRock’s ETF, which similarly includes a surveillance-sharing agreement with Coinbase. Despite ongoing regulatory challenges, these institutions are showing a growing interest and involvement in the cryptocurrency market.
