Cboe Global Markets, a prominent exchange operator, has made revisions to five spot Bitcoin (BTC) Exchange-Traded Fund (ETF) applications by incorporating a surveillance-sharing agreement (SSA) with Coinbase. The Cboe ETF amendments were submitted to the United States Securities and Exchange Commission (SEC) on July 11. The ETFs in question are proposed by Invesco, VanEck, WisdomTree, Fidelity, and a joint fund by ARK Invest and 21Shares.
Cboe confirms surveillance sharing agreement with Coinbase
Cboe confirmed that it has reached an agreement with Coinbase to establish the surveillance-sharing agreements. The settlement between the Cboe and Coinbase occurred on June 21. In the initial filings for the ETFs, it was mentioned that the parties were expecting to enter into an SSA before potentially offering the ETFs. The inclusion of SSAs aims to meet the SEC’s requirements, which focus on preventing fraudulent activities and safeguarding investors. The regulator had outlined on March 10 that an exchange seeking approval for an ETF must have a comprehensive surveillance-sharing agreement with a regulated market of significant size that relates to the underlying or reference bitcoin assets.
Spot Bitcoin ETF applications have garnered considerable attention in the industry as of late. Fidelity, Invesco, Wisdom Tree, and Valkyrie followed suit after BlackRock, a $10 trillion asset management firm, filed an ETF for SEC approval. On June 29, the U.S. stock exchange Nasdaq also resubmitted its application to list BlackRock’s ETF, which similarly included an SSA with Coinbase.
Following the filing amendments by Cboe, the shares of Coinbase (COIN) experienced an uptick of nearly 10% on June 11, reaching their highest price since August 16, as reported by Google Finance. However, it is worth noting that Coinbase is currently embroiled in a legal battle with the SEC over allegations of offering cryptocurrencies that the regulator deems to be unregistered securities.
Coinbase agreement boosts investor sentiment
The introduction of SSAs in the ETF applications indicates a concerted effort by the exchange operators and fund providers to align with regulatory requirements. By partnering with Coinbase, a prominent and regulated cryptocurrency exchange, these entities aim to enhance surveillance and oversight in the Bitcoin market. The involvement of established financial institutions, such as Invesco, VanEck, WisdomTree, Fidelity, and ARK Invest, signifies their confidence in the potential of Bitcoin ETFs and their commitment to regulatory compliance.
The implementation of SSAs is a significant step toward addressing the SEC’s concerns about market manipulation and investor protection. These agreements enable the sharing of surveillance data between the ETF operators and Coinbase, allowing for the monitoring and detection of any suspicious trading activities related to the underlying Bitcoin assets. This collaboration between traditional financial institutions and cryptocurrency platforms like Coinbase is crucial in bridging the gap between the emerging digital asset market and the established regulatory framework.
While the Bitcoin ETF filings and partnership with Coinbase have positively influenced investor sentiment toward Coinbase shares, it is essential to recognize the ongoing legal challenges faced by the company. The SEC lawsuit against Coinbase alleges that the platform offered cryptocurrencies that should have been registered as securities. The outcome of this lawsuit will have implications not only for Coinbase but also for the broader cryptocurrency industry and its relationship with regulators.
Cboe Global Markets’ amendments to spot Bitcoin ETF applications to incorporate surveillance-sharing agreements with Coinbase demonstrate the industry’s proactive approach to meeting regulatory standards. The involvement of prominent financial institutions in filing ETF applications and partnering with regulated cryptocurrency exchanges signifies their confidence in the potential of Bitcoin ETFs. The implementation of surveillance-sharing agreements enhances oversight and aims to prevent fraudulent conduct, addressing the SEC’s concerns. However, it is essential to note that Coinbase is simultaneously contending with a lawsuit from the SEC regarding the offering of unregistered securities. The outcome of this legal battle will have implications for both Coinbase and the wider cryptocurrency industry.
