After the SEC allegedly stated that the file was confusing, the application included a Nasdaq-Coinbase agreement “intended to supplement the exchange’s market surveillance program.”
A filing revealed a “surveillance-sharing agreement” between the asset manager BlackRock and bitcoin exchange Coinbase, which is the most recent development involving the company’s plan to introduce a spot Bitcoin exchange-traded fund (ETF).
The Nasdaq proposal for a rule modification to permit the listing of BlackRock’s Bitcoin ETF was included in the submission made on June 29th to the U.S. Securities and Exchange Commission (SEC).
According to the document, Nasdaq and Coinbase reached an agreement on June 8 to improve the exchange’s market surveillance mechanism. Through the deal, Nasdaq would have access to information on Bitcoin spot trading, enhancing its current monitoring capabilities.
Shortly after ARK Investment Management revised their spot Bitcoin ETF application, the SEC received the filing. A surveillance-sharing deal with the Chicago Board Options Exchange (Cboe) and an unnamed U.S.-based cryptocurrency exchange was part of ARK’s updated application. The anonymous exchange was suspected to be Coinbase, which might interfere with BlackRock’s ETF application.
According to reports, the SEC stated on June 30th that the crypto ETF filings with Nasdaq and Cboe were not adequately detailed and transparent. There is a need for more openness and regulatory monitoring, as the SEC recommended the applicants to submit more details about their surveillance procedures.
As part of its continued efforts to enter the cryptocurrency industry and give investors exposure to Bitcoin through a regulated investment vehicle, BlackRock first submitted an application for the spot Bitcoin ETF on June 15th.
The American securities authority has not yet approved any spot ETFs tied to cryptocurrency investments, despite repeated requests from market players. Grayscale Investments sued the SEC in June 2022 as a result of the SEC’s rejection of its spot Bitcoin ETF. The lawsuit claimed that the SEC has treated similar investment vehicles indifferently, highlighting the need for more precise regulatory standards.
The current issues surrounding BlackRock’s ETF application and the SEC’s investigation of monitoring arrangements highlight the difficulties and regulatory hurdles associated with the introduction of financial instruments tied to cryptocurrencies. Market participants are still navigating the shifting terrain while attempting to offer investment possibilities that satisfy investor demands and regulatory requirements.