The U.S. Securities and Exchange Commission (SEC) on Sunday, September 9, announced in a surprising move the suspension of trading on a pair of investment products, the Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF). The two investment instruments issued by XBT Provider AB, a Swedish based subsidiary of U.K. firm CoinShares Holdings; are currently listed on Nasdaq INC exchange in Stockholm and the pair work on the basis of tracking cryptocurrency prices minus fees while offering easy access to Bitcoin and Ether via your broker or bank.
In its official statement posted on its website, the SEC cited its reason for the suspension of these securities as due to the unavailability of current, consistent and accurate information concerning these products which has led to “confusion amongst market participants” based in the U.S. on the nature of these financial instruments. This confusion as cited by the SEC is hinged on whether CXBTF and CETHF are Exchange Traded Funds (ETFs) especially as the SEC continues to withhold decision on Bitcoin-backed ETFs.
Clarifying its decision, the SEC pointed out discrepancies in characterization of these products as a factor; as it specified that materials submitted to enable the sale of these financial products in the U.S. and information available on certain trading platforms vary; with these products being classified by some exchanges as Exchange Traded Funds or Exchange Traded Notes as against the XBT issuers characterization as ‘non-equity linked certificates’; hence the need to suspend trading as it looks to perform its duty of protecting investors and public interests.
The suspension order which took effect from 5:30 pm EDT yesterday, will last through 11:59 pm EDT on September 20, 2018 unless the SEC finds reason to extend the suspension. However, trading on other non-U.S. exchanges will not be interrupted during the suspension. The issuer and affected company XBT AB and Nasdaq have as at press time declined official comments in response to the suspension order.