Asset management giant BlackRock’s recent filing for a Bitcoin exchange-traded fund (ETF) has taken an interesting turn with the inclusion of a “surveillance-sharing agreement” with Coinbase, a leading cryptocurrency exchange.
The filing, made on June 29 with the United States Securities and Exchange Commission (SEC), requested a rule change to allow the listing of BlackRock’s Bitcoin ETF on the Nasdaq stock exchange.
The document revealed that a June 8 agreement between Nasdaq and Coinbase was designed to enhance the exchange’s market surveillance program and grant access to data on spot Bitcoin trades.
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This announcement followed ARK Investment Management’s amendment to its own spot Bitcoin ETF application, which incorporated a surveillance-sharing agreement with the Chicago Board Options Exchange (Cboe) and an undisclosed U.S.-based crypto exchange.
Speculation arose that the agreement was with Coinbase, potentially conflicting with BlackRock’s ETF application.
On June 30, the SEC reportedly stated that the crypto ETF filings with Nasdaq and Cboe were insufficiently clear and comprehensive, urging the applicants to provide additional information on surveillance arrangements.
It is worth noting that BlackRock initially submitted its application for the spot Bitcoin ETF on June 15.
Despite several market participants submitting ETF applications linked to cryptocurrency investments, the SEC has yet to approve any spot ETF related to crypto.
In response to the denial of its spot Bitcoin ETF in June 2022, Grayscale Investments filed a lawsuit against the SEC, accusing the regulator of applying inconsistent treatment to similar investment vehicles.
The inclusion of surveillance-sharing agreements in these recent ETF filings reflects a growing emphasis on market surveillance and investor protection.
Regulators are keen to ensure that proper monitoring mechanisms are in place to prevent market manipulation and illicit activities within the crypto space.
By partnering with trusted cryptocurrency exchanges like Coinbase, BlackRock and ARK Investment Management aim to address the SEC’s concerns and provide a transparent and secure environment for investors looking to access Bitcoin through regulated investment vehicles.
As the SEC continues its evaluation of the latest ETF filings, the crypto industry eagerly awaits a breakthrough in the approval of a spot Bitcoin ETF, which could potentially open up new avenues for institutional and retail investors to participate in the crypto market.
