SEC Suspends Trading Bitcoin, Ether Trackers on Sweden-Based ETNs

The US Securities and Exchange Commission (SEC) has on Sept. 9 announced the temporary suspension of trading in the securities Bitcoin Tracker One (“CXBTF”) and Ether Tracker One (“CETHF”). CXBTF and CETHF were offered through Exchange Traded Notes (ETNs) by XBT Provider AB SE0010296574.ST and its parent company, CoinShares Holdings Ltd. The CXBTF product was quoted in U.S. dollars last month to allow those who want to buy Bitcoin without actually buying Bitcoin and help brokerages offer it to American investors since no Exchange Traded Fund (ETF) has been approved for the purpose. However, SEC thinks there is a confusion of the ETN being run as an ETF hence the suspension.

The suspension of this trading applies to prevent US users from gaining access to the assets for the time being as made available by the Sweden-based company. It does not seem like the SEC is permanently closing down the ETN use in the US. Rather, it will terminate at 11:59 pm EDT Sept. 20, 2018.

SEC notes: “The Commission temporarily suspended trading in the securities CXBTF and CETHF because of confusion amongst market participants regarding these instruments. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).”

It also cautions broker-dealers, shareholders, and prospective purchasers that “they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.”

Positive or negative?
The termination date of the trading suspension will coincide with the expected day (Sept 20) for a decision on the Van Eck SolidX ETF application (if not postponed again). So far, the suspension announcement has been trailed by mixed feelings especially in relation to the pending news. While some think that something big is about to happen especially with the approval of the much-awaited ETF application, others think it’s a mere manipulation of the crypto market.

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