Two securities listed on the Stockholm Stock Exchange were issued suspension notices by the Securities and Exchange Commission (SEC) recently. Bitcoin Tracker One and Ether Tracker One were suspected to have materials that cause confusion over their inherent nature. The US financial watchdog published the notices on its website, saying that trading websites and broker-dealer application materials characterize the two securities as exchange-traded funds (ETFs). SEC has not greenlighted any crypto-related ETF products to date.
What Rules Did the Securities Break?
SEC believes that the two crypto-related securities have been wrongly classified as ETFs by broker-dealers and trading platforms. They are in fact “non-equity linked certificates,” as specified by the issuer — XBT Provider AB, a Stockholm-based Swedish company.
The agency clarified:
“It appears … that there is a lack of current, consistent and accurate information concerning Bitcoin Tracker One (Ticker Symbol: CXBTF) and Ether Tracker One (Ticker Symbol: CETHF), issued by XBT Provider AB (publ).”
The agency has suspended trading till Sept. 20, owing to the confusion regarding the financial instruments’ status as an ETF. It added that the suspension had been ordered to protect investor interests.
Is the SEC Signaling Anti-ETF Sentiments?
With the current suspensions in place, it seems that SEC is not comfortable with the idea of a crypto ETF yet. The agency has already rejected more than half a dozen applications for cryptocurrency ETFs. The latest move could disappoint investors further who were expecting an ETF product to debut in the market
Both securities are part of Nasdaq’s Nordic markets and offered exposure to both Bitcoin and Ethereum with lesser fees. XBT Provider, on the other hand, is owned by CoinShares, a London-based investment firm. Neither Nasdaq nor CoinShares commented on the story.
As the agency is tightening its grip on a relatively smaller part of a regulated entity like Nasdaq Nordic, the fate of the crypto ETF proposal by Cboe-VanEck-SolidX remains unclear. The decision about the application will be made on Sept. 30, 10 days after the suspension on the two securities is lifted.