In a significant development, BlackRock, the prominent asset manager, has formed a strategic alliance with Coinbase, as a “surveillance-sharing partner” for its spot Bitcoin exchange-traded fund (ETF) filing. The collaboration aims to bolster market surveillance efforts and provide access to vital data on spot BTC trades.
The SEC Filing and Nasdaq-Coinbase Agreement
On June 29, the Nasdaq stock exchange resubmitted a proposed rule change to the United States Securities and Exchange Commission. This was to seek approval for listing BlackRock’s Bitcoin ETF. The filing disclosed a crucial agreement between Nasdaq and Coinbase on June 8. Further, it was designed to complement the exchange’s market surveillance program.
ARK Investment Management’s Spot BTC ETF Application
In response to the SEC’s call for more clarity on surveillance arrangements, ARK Investment Management revised its spot BTC ETF application. This included a similar surveillance-sharing agreement with the Chicago Board Options Exchange (Cboe) and an unidentified U.S.-based crypto exchange.
Speculation arose that the latter could be Coinbase, potentially causing conflict with BlackRock’s ETF application.
The SEC’s Response and BlackRock’s Initiative
On June 30, the SEC expressed dissatisfaction with the lack of clarity and comprehensiveness in the crypto ETF filings submitted to Nasdaq and Cboe. The regulator urged applicants to provide additional information on surveillance arrangements. BlackRock had initially applied for the spot BTC ETF on June 15. This was aimed to gain approval for the groundbreaking investment vehicle.
Despite numerous applications from various market participants, the U.S. securities regulator has not yet approved any spot ETF linked to cryptocurrency investments. Notably, Grayscale Investments faced a setback when its spot Bitcoin ETF was denied approval in June 2022.
The further lead the company filing a lawsuit against the SEC. The lawsuit alleged that the regulator failed to apply consistent treatment to similar investment vehicles.