• An investment manager with $1 billion in assets under management (AUM) is naming Coinbase as its surveillance-sharing partner in an application to list a spot Bitcoin (BTC) exchange-traded fund (ETF) on the Nasdaq stock exchange.
• Surveillance-sharing agreements are considered a standard market practice for reducing fraud and market manipulation, which the SEC cites for rejecting spot Bitcoin ETF applications.
• Valkyrie updated its filing after the U.S. Securities and Exchange Commission (SEC) rejected its previous attempts for failing to meet regulatory requirements for preventing fraudulent acts and protecting investors.
$1 Billion Asset Manager Names Coinbase As Surveillance Partner
An investment manager with $1 billion in assets under management (AUM) is naming Coinbase as its surveillance-sharing partner in an application to list a spot Bitcoin (BTC) exchange-traded fund (ETF) on the Nasdaq stock exchange. The move comes after the U.S. Securities and Exchange Commission (SEC) rejected Valkyrie’s previous attempts due to failure to meet regulatory requirements that prevent fraudulent activities and protect investors from harm.
Surveillance Agreements To Reduce Fraud & Market Manipulation
Surveillance-sharing agreements are considered standard market practices that help reduce fraud and market manipulation, which is one of the primary reasons why SEC cites for rejecting spot Bitcoin ETF applications. In new documents submitted on Wednesday, Valkyrie said that Nasdaq already executed a term agreement to enter into a surveillance-sharing agreement with Coinbase, which accounts for over 50% of the BTC/USD spot trading volume globally.
Nasdaq & CBOE Execute Term Agreements With Coinbase
According to Valkyrie’s filing, “On June 30, 2023, the Exchange executed a term sheet with Coinbase to enter into a Spot BTC SSA [surveillance sharing agreement]. Based on this agreement, the Exchange and Coinbase will finalize and execute a definitive agreement that the parties expect to be executed prior to allowing trading of the Commodity-Based Trust Shares.” This could possibly set them up positively when it comes time for regulators to approve their application for listing their ETF on Nasdaq stock exchange.
Other Investment Firms Also Seeking Approval From SEC
The SEC had also recently informed both Nasdaq and Chicago Board Options Exchange (CBOE), two other prominent exchanges where BlackRock and Fidelity were seeking listing approval of their own ETFs respectively, that their applications were unclear or incomplete thus requiring additional information before getting approved by regulators at large scale level .
Conclusion: Regulatory Compliance Is Crucial For Approval Of Spot Bitcoin ETFs
In conclusion, it is necessary for firms seeking listings approval of their respective spot Bitcoin ETFs from SEC need not only provide detailed information but also adhere strictly follow guidelines set by regulating bodies such as demonstrating solid anti–fraudulent activity protocols backed up by credible third party surveillance partners like Coinbase if they wish have any chance of getting approved anytime soon by authorities or else face long drawn out process before finally getting listed officially on exchanges like Nasdaq or CBOE etcetera