In its latest filing with the United States Securities and Exchange Commission (SEC), asset manager BlackRock has included a “surveillance-sharing agreement” with cryptocurrency exchange Coinbase as part of its proposed spot Bitcoin exchange-traded fund (ETF). The filing, made on June 29, also featured an agreement between Nasdaq and Coinbase, which aims to enhance the exchange’s market surveillance program and provide access to data on spot BTC trades.
The SEC had previously expressed concerns about the clarity and comprehensiveness of crypto ETF filings with Nasdaq and the Chicago Board Options Exchange (Cboe), urging applicants to include additional information on surveillance arrangements. BlackRock’s initial application for the spot BTC ETF was submitted on June 15. Meanwhile, ARK Investment Management had amended its own ETF application to include a surveillance-sharing agreement with Cboe and an unnamed U.S.-based crypto exchange, suspected to be Coinbase. This raised questions about a potential conflict with BlackRock’s ETF application.
Despite several applications from market participants, the SEC has yet to approve any spot ETF linked to crypto investments. Grayscale Investments, after the denial of its spot Bitcoin ETF in June 2022, even filed a lawsuit against the SEC, accusing the regulator of inconsistent treatment of similar investment vehicles.
Conclusion
This development highlights the ongoing regulatory challenges faced by the cryptocurrency industry in obtaining approval for ETFs tied to digital assets. It also emphasizes the importance of implementing robust market surveillance programs to address concerns related to market manipulation and investor protection.
Overall, the inclusion of Coinbase as a surveillance-sharing partner in BlackRock’s Bitcoin ETF filing demonstrates the industry’s efforts to comply with regulatory requirements and enhance transparency in crypto markets. As the SEC continues to evaluate these filings, market participants eagerly await the approval of a spot BTC ETF, which could have significant implications for the wider adoption and price dynamics of Bitcoin.