SEC temporarily halts trading of the exchange notes on Bitcoin and Ethereum


As reported by the news publishing Cryptoglobe, yesterday the SEC announced the temporary imposition of a ban on trade in the company’s securities “XBT Provider” associated with cryptocurrencies such as Bitcoin and Ethereum. Thus, the purchase and sale of Bitcoin and Ethereum ETN-ETN will be unavailable from 21:30 (UTC ) September 9, 2018 to 03:59 (EDT) on 21 September 2018.

For anybody not a secret that Bitcoin Tracker One (“CXBTF”) and Ether One Tracker (“CETHF”) are exchange-traded notes (ETN) for digital currencies such as Bitcoin (BTC) and Ethereum (ETH), Issuer of which is a well-known Swedish organization “XBT Provider”. This subsidiary of the British company Global Advisors (Holdings) Limited.

Their action to suspend the trading of the cryptocurrency ETN Commission SEC commented via Twitter in the following way:

The Securities and Exchange Commission announced the temporary suspension of trading in the securities of Bitcoin Tracker One (“CXBTF”) and Ether One Tracker (“CETHF”) commencing at 5:30 pm EDT Sept. 9, 2018 and terminating at 11:59 pm EDT Sept. 20, 2018.

— SEC_News (@SEC_News)

In his tweets, the Commission on securities and exchange Commission (SEC) refers to the PDF document number No. 84063 September 9, 2018, which indicates the following:

“Under paragraph 12 (k) of the Act of 1934 on stock exchanges the SEC announces a temporary ban for trade cryptocurrency exchange notes. This limitation will apply to trades in securities “CXBTF” and “CETHF” from 9 to 20 September this year.”

In turn, the Commission SEC indicated the cause of suspension of trading of the cryptocurrency ETN, saying the following:

“Due to the perceived uncertainty among the members of the trade Commission at the securities and exchange Commission has decided to impose a temporary ban on the auction of the exchange notes CXBTF and CETHF”.

Apparently, the “confusion among traders”, which according to the SEC, occurred against a background of a mistaken belief on the part of inexperienced retail investors that CXBTF and CETHF are exchange-traded funds (ETFs). While securities companies “XBT Provider” is not contrary to the laws of the United States, one of the possible reasons for a temporary suspension of trade is the desire of the SEC to discuss with the broker-dealers are several technical points that will provide the necessary protection of investors.

In fact, the main cause of uncertainty was not available with the accurate information regarding the “Bitcoin Tracker One” (“CXBTF”) and “Ether One Tracker” (“CETHF”). So, for example, according to requests of broker-dealers to sell securities in the United States, and according to the information on some of the exchange websites, Bitcoin and Ethereum ETN-ETN describes as “the Investment exchange-traded funds”. In other sources can be found following the definition of these trading tools: “Exchange traded notes”.

Meanwhile, the company-Issuer “XBT Provider” describes CXBTF and CETHF as “Certificates that are not related to equity participation”.

It should be noted that before the introduction of the ban on trading in exchange-traded notes CXBTF and CETHF was conducted on the largest trading platform of NASDAQ/OMX in Stockholm. In turn, recently, securities have been added to the shopping list of the company’s OTC Link under the control of the OTC Markets Group, Inc.

Thus, the Commission on securities and stock exchanges of the USA (SEC) considers that to comply with the public interest and investor protection, it is necessary to perform the temporary suspension of trading in securities CXBTF and CETHF stock company “XBT Provider”.

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