BlackRock Refiles Spot Bitcoin ETF with Coinbase as Surveillance Partner

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Key takeaways:

  • The most recent filing disclosed a “surveillance-sharing agreement” between asset management BlackRock and crypto exchange Coinbase.
  • The Nasdaq stock exchange resubmitted a proposed rule modification on June 29 to the SEC.

A “surveillance-sharing agreement” between asset management BlackRock and crypto exchange Coinbase was disclosed in the most recent filing about BlackRock’s intention to introduce a spot Bitcoin Exchange Traded Fund (ETF).

The action is consistent with the other applications submitted by the Chicago Board Options Exchange (CBOE) Global Markets on behalf of Ark Invest and Fidelity Investments, both of which listed Coinbase as their SSA partner.

The Nasdaq stock exchange resubmitted a proposed rule modification on June 29 to the Securities and Exchange Commission (SEC), requesting permission to list BlackRock’s Bitcoin ETF.  

A June 8 agreement between the Nasdaq and Coinbase was described in the document as being “intended to supplement the exchange’s market surveillance program” and provide access to information on spot Bitcoin trading.

After ARK Investment Management revised its application for a spot Bitcoin ETF to incorporate a surveillance-sharing arrangement with the CBOE and an undisclosed US-based crypto exchange, the SEC filing was made public. There were some rumors going around at the time that the deal was with Coinbase, which would appear to conflict with BlackRock’s ETF filing.

According to reports, the SEC stated on June 30 that the Bitcoin ETF filings with Nasdaq and CBOE were not “sufficiently clear and comprehensive,” advising the applicants to provide more details on surveillance setups. In addition, the regulator stated that the spot Bitcoin exchange is required to run a “market of significant size” to qualify. On June 15, BlackRock submitted its initial application for the Bitcoin ETF.

It is worth noting that the US securities authorities have yet to approve any spot ETF linked to cryptocurrency investments, despite repeated requests from market participants. Grayscale Investments sued the SEC in June 2022 after the commission rejected the spot Bitcoin ETF, claiming it had failed “to apply consistent treatment to similar investment vehicles.”

Since the SEC has consistently denied such applications, most businesses had given up hope that the regulator would shift its position in the near future at one point in 2022. However, the involvement of significant traditional financial institutions has inspired fresh optimism.

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