SEC suspends trading in bitcoin and ether listed investment vehicles

September 10, 2018
Chris Wheal

The US financial markets regulator announced on Sunday it had suspended trade in exchange-traded bitcoin and ether tracking certificates.

SEC suspends two crypto-tracking investment products

The Securities and Exchange Commission (SEC) ordered the suspension of trading in two vehicles – Bitcoin Tracker One and Ether Tracker One – issued by XBT Provider AB, a Stockholm-based company.

Investor confusion

Citing a lack of current, consistent and accurate information regarding the two trackers, the SEC said confusion resulted among market participants.

“For example, the broker-dealer application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterise them as ‘Exchange Traded Funds’. Other public sources characterise the instruments as ‘Exchange Traded Notes’,” the SEC said.

By contrast, XBT Provider called them in its offering ‘non-equity linked certificates’ where the two instruments are listed on Nasdaq/OMX in Stockholm.

The SEC has this year refused several applications for US companies to list bitcoin exchange-traded funds, saying the need to protect consumers from fraudulent and price manipulative activities in the underlying crypto market.

Public interest

The XBT Provider products are likely, therefore, to need further clarification on their content before the SEC lifts the suspension.

“The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above quoted company,” the regulator said. It halted trading on 9 September, with the suspension to run until 20 September.

It conceded, however, that broker dealers may still engage in activities in the US solely for the purpose of assisting customers with the liquidation of owned positions.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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