Just yesterday, the US SEC (Securities and Exchange Commission) moved to suspend both Bitcoin Tracker One and Ether Tracker One trading. The announcement was revealed through a Tweet that linked to a securities exchange act of 1934, release no. 84063.
SEC Issues Order of Suspension of Trading in Bitcoin Tracker One (“CXBTF”) and Ether Tracker One (“CETHF”) https://t.co/5z1vEYFBFB
— SEC_News (@SEC_News) September 9, 2018
What Are Bitcoin and Ether Trackers?
Also referred to as CXBF and CETHF, Bitcoin and Ether trackers are simply instruments that traders use to enter the crypto market and track the price of cryptocurrencies with fewer fees. So far, the two instruments have been listed on Nasdaq Inc exchange while trading over the counter in US-based exchanges.
According to SEC, the trading of Bitcoin Tracker One and Ether Tracker One has been halted as of September 9th, until September 20th, 2018.
Getting Rid of the Confusion
The move to immediately suspend the two investment products, according to the SEC, is aimed at getting rid of the confusion of the trackers with ETFs (exchange-traded funds).
Furthermore, in a notice posted on its website, the SEC pointed out that “It appears … that there is a lack of current, consistent and accurate information,” and that “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.”
How Bitcoin and Ether Trackers Work
Although Bitcoin Tracker One is listed in Sweden, it has been traded on Stockholm’s Nasdaq exchange for over 3 years and works by allowing American investors to buy assets in their local currency, using US dollars. In essence, they have been designed to work like an ETN instead of an ETF, thereby symbolizing support for a debt issuer and allowing individuals to gain exposure to Bitcoin markets in Europe.
On the other hand, Ether Tracker One works in a similar way, but only started being used publicly in 2017.
These developments come as another move by the SEC to take a strict stance against allowing ETFs to get to market, even as investment firms keep on pushing a variety of investment products that they hope will make it easy to trade crypto like a regular stock.
According to Reuters, some of the ETF providers like BlackRock Inc have called upon the SEC to standardize terms such as ETF to clear the confusion that currently exists in the market.
The craze around cryptocurrencies has been driven by the technology’s anonymity and the fact that it enables movement of money quickly. As a result, funds that hold crypto not only attract huge numbers of investors but also push prices much higher.
What do you think about the move by the SEC? Share your thoughts and opinions with us in the comments section.