The SEC suspends bitcoin derivatives trading from XBT

[Paha87]

Commission United States securities and exchange Commission has suspended trading in the two products XBT Provider: Bitcoin Tracker Tracker One, and Ether One. The Agency attributes "the lack of current, consistent and accurate information, which leads to confusion among market participants" as a reason.

Sunday 9 September the Commission and the US securities and exchange Commission (SEC) issued the "Order to suspend" for two exchange-traded products, released XBT Provider AB, a Swedish company with headquarters in Stockholm.

The Commission States:

There is no current, consistent and accurate information regarding Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF), which leads to confusion among market participants regarding these financial instruments.

Noting that both instruments that track the prices of their respective cryptocurrency are listed and sold on The NASDAQ / OMX in Stockholm, and have recently been listed on the OTC Link managed by OTC Markets Group Inc., The SEC added:

The Commission considers that the public interest and protection of investors require the suspension of trading in securities of the above company.

The Agency clarifies:"pursuant to section 12 (k) of the securities exchange Act of 1934, trading in two securities is suspended for the period from 17:30 (EDT) on September 9, 2018, until 23:59 (EDT) on September 20, 2018."


                                       

ETF, ETN or certificate that is not associated with the shares?
The SEC has begun to explain the inconsistency of how these two products are classified, and clarifies:

The broker-dealer application materials submitted for the offering and sale of these financial products in the United States, as well as some trading sites, characterize them as "Exchange traded funds (ETFs)".

The Agency defines ETFs as"registered investment companies that offer investors a way to pool their money in a Fund that invests in stocks, bonds, or other assets." In turn, investors are interested in the Fund.

However, the Commission indicated that "other public sources described the tools as "exchange-traded note (ETN)". Unlike ETFs, an ETN instrument is an unsecured debt of financial institutions traded on a securities exchange. "ETN's payment terms are related to the performance of a reference index or benchmark representing the purpose of an ETN investment," the Agency said.

According to the SEC:

Etns are often confused with exchange traded funds (ETFs). Etns and ETFs are traded on a securities exchange and can be bought and sold during the day, but there are important differences.

To clarify this issue, the Board noted that "the Issuer characterizes them in its offering materials as' non-equity certificates which, in the opinion of the XBT provider, are not primarily protected and have no interest'.

In addition to Bitcoin Tracker One and Ether Tracker One, the company has two more products: Bitcoin Tracker Euro and Ether Tracker Euro, which the SEC's ban doesn't seem to affect.

Link to information resource - https://altstake.io/news/sec-priostanavlivaet-torgovlyu-bitkoin-derivativami-ot-xbt