Why the SEC is Investigating Bitcoin and Ether Exchange-Traded Investment Products


SEC Suspends Exchange Traded Bitcoin and Ether

The SEC issued an order on Sunday suspending trading of Bitcoin Tracker One and Ether Tracker One, which are two exchange-traded notes issued by XBT Provider AB.

The official order cites “confusion amongst market participants” based on financial instruments’ natures. The suspension is effective as of today and will continue through September 20th. The good news is that the order will not affect trading on non-U.S. exchanges.

The orders states:

The broker-dealer application materials submitted to enable the offer and sale of these financial products in the U.S., as well as certain trading websites, characterize the instruments as ‘Exchange Traded Funds.’ Other public sources characterize the instruments as ‘Exchange Traded Notes.’ By contrast, the issuer characterizes them in its offering materials as ‘non-equity linked certificates.’

The SEC further added that it made its decision in the public interest and that it protects investors. The news comes a month after the products announced that it will be quoted in U.S. dollars. The products are also billed as a “soft opening” for public markets crypto trading and they were contrasted with more sophisticated exchange-traded fund products that had recently been downplayed by investors and described more as an immediate method to access crypto exposure using dollars.

Ryan Radloff, CEO of CoinsShares Holdings sated

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona.”

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