US Regulators Suspend Bitcoin and Ether Investment Vehicles

A highly touted investment instrument that sought to appeal to U.S. public markets investors looking for cryptocurrency exposure has just seen a setback.

Announced on Sunday, the U.S. Securities and Exchange Commission (SEC) has issued an order seeking to suspend the trading of the Bitcoin Tracker One and Ether Tracker One exchange-traded notes, issued by XBT Provider AB, a subsidiary of CoinShares Holdings.

In the official order, the SEC cited a “confusion amongst market participants” as to the nature of the financial instruments as the reason for the move.

“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, characterize them as ‘Exchange Traded Funds.’ Other public sources characterize the instruments as ‘Exchange Traded Notes.’ By contrast, the issuer characterizes them in its offering materials as ‘non-equity linked certificates,'” the release reads.

The SEC went on to say that the decision was in “the public interest” and that it was line with its mandate to ensure the “protection of investors.”

The suspension is to begin at 5:30 p.m. EDT on September 9, 2018, through 11:59 p.m. EDT on September 20, 2018.

The news comes nearly a month after the products, live on the Nasdaq Stockholm exchange since 2015, made a move to court U.S. investors, announcing that they would be quoted in U.S. dollars starting August 15.

Billed as a “soft opening” in press coverage by Bloomberg, the products were contrasted with more sophisticated exchange-traded fund (ETF) products which had recently been shot down by regulators, as being a more immediate way to access crypto exposure with dollars.

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona, Ryan Radloff, the chief executive officer at CoinShares Holdings said at the time.

Representatives from CoinShares Holdings were not available for comment at press time.

Author: Pete Rizzo
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