Cboe Global Markets Partners with Coinbase for Bitcoin ETF Applications, Including Fidelity's

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In a recent development, exchange operator Cboe Global Markets has submitted amended applications to the US Securities and Exchange Commission (SEC) to list and trade three spot bitcoin exchange-traded funds (ETFs). These applications include one by Fidelity Investments and feature surveillance-sharing agreements with prominent crypto-trading platform Coinbase.

The market for bitcoin exchange-traded funds has faced numerous rejections by the SEC due to concerns over compliance with anti-fraud and anti-manipulation regulations. However, to address these concerns, the SEC outlined the requirement for comprehensive surveillance-sharing agreements with regulated markets dealing with the underlying bitcoin assets.

Also Read: Europe's First Bitcoin ETF: Launching After a Year-long Delay

Cboe Global Markets' Amended Applications

Cboe Global Markets, a leading exchange operator, has taken steps to meet the SEC's standards by filing amended applications for three spot bitcoin ETFs. Among these applications is one proposed by Fidelity Investments, a well-known asset management firm. These filings now include surveillance-sharing agreements with Coinbase, a significant player in the crypto-trading space.

Coinbase's Importance in the Market

Coinbase, a prominent cryptocurrency trading platform, has witnessed substantial growth and popularity, attracting approximately half of the US dollar-bitcoin trading volume in May. Given its significant market presence, establishing a surveillance-sharing agreement with Coinbase becomes crucial for the listing and trading of bitcoin ETFs.

Also Read: Bank of America's Alleged Anti-Crypto Move: Coinbase CEO Responds

Nasdaq's Refiled Application

Notably, Nasdaq, the world's second-largest stock exchange, recently resubmitted an application to the SEC for a spot bitcoin ETF managed by BlackRock, the largest asset manager globally. This application also highlights the inclusion of a surveillance-sharing agreement with Coinbase, further emphasizing the importance of cooperation between regulated markets and cryptocurrency platforms.

Also Read: Sealing the Future: The Importance of Approving a Spot Bitcoin ETF

The SEC's Lawsuit Against Coinbase

In a related development, the SEC has taken legal action against Coinbase, alleging the platform's failure to register as an exchange and evasion of disclosure requirements aimed at safeguarding investors. Coinbase, in response, argues that the SEC lacks authority to pursue civil claims since the crypto assets traded on its platform do not qualify as "investment contracts" or securities.

The recent filing of amended applications by Cboe Global Markets, incorporating surveillance-sharing agreements with Coinbase, signals a concerted effort to meet the SEC's requirements for spot bitcoin ETFs. Establishing these agreements with prominent cryptocurrency platforms like Coinbase is vital to enhance investor protection and mitigate fraudulent practices in the market.

Also Read: Grayscale Challenges SEC's Rejection of Spot Bitcoin ETF

FAQs

1. What is the significance of surveillance-sharing agreements for bitcoin ETFs?

Surveillance-sharing agreements are crucial for bitcoin ETFs as they demonstrate the exchanges' commitment to preventing fraudulent and manipulative practices, ensuring investor protection, and promoting market integrity.

2. Why is Coinbase's cooperation important for the listing and trading of bitcoin ETFs?

Coinbase's substantial market presence and high trading volume make it an essential partner for the listing and trading of bitcoin ETFs. Surveillance-sharing agreements with Coinbase help establish robust monitoring mechanisms for the underlying bitcoin assets.

3. How does the SEC's lawsuit against Coinbase impact the crypto industry?

The SEC's lawsuit against Coinbase has broader implications for the crypto industry. The outcome of the legal proceedings will shape regulatory oversight and define the categorization of crypto assets as securities or investment contracts.

4. What is the role of Cboe Global Markets in the bitcoin ETF applications?

Cboe Global Markets, as an exchange operator, plays a crucial role in filing and amending applications for bitcoin ETFs. By incorporating surveillance-sharing agreements, Cboe aims to meet the SEC's requirements and facilitate the listing and trading of these ETFs.

5. How might the inclusion of Fidelity's bitcoin ETF impact the market?

Fidelity Investments' involvement in the bitcoin ETF applications brings additional credibility and institutional support to the market. If approved, Fidelity's ETF could attract a broader range of investors and contribute to the mainstream adoption of bitcoin as an investment asset.