The involvement of BlackRock and Coinbase as “surveillance-sharing” partners adds a layer of intrigue, potentially shaping the landscape of digital asset investments in this unfolding saga of crypto ETFs.
The recent filing from asset manager BlackRock in their quest to launch a Bitcoin exchange-traded fund (ETF) shed light on a captivating partnership in an intriguing twist. This filing unveiled a remarkable “surveillance-sharing agreement” between BlackRock and the renowned cryptocurrency exchange Coinbase.
Unveiled in a filing with the United States Securities and Exchange Commission (SEC) on June 29, the application requested a rule change from the Nasdaq stock exchange to enable the listing of BlackRock’s Bitcoin ETF. The filing not only disclosed this significant move but also provided intricate details of an agreement inked on June 8 between Nasdaq and Coinbase.
This pioneering collaboration was devised to enhance the exchange’s market surveillance program, ensuring thorough monitoring of the BTC spot trades. Moreover, it granted Coinbase access to invaluable data pertaining to these transactions.
Interestingly, the unveiling of this SEC filing coincided with ARK Investment Management’s amendment to its own spot BTC ETF application. ARK’s revised submission now included a surveillance-sharing agreement with the Chicago Board Options Exchange (Cboe) and an undisclosed US-based crypto exchange. Speculation swirled, suggesting that the enigmatic partner in question was none other than Coinbase, potentially conflicting with BlackRock’s ETF application.
On June 30, reports emerged that the SEC had expressed dissatisfaction with the clarity and comprehensiveness of the crypto ETF filings submitted to both the Nasdaq and the Cboe. The regulatory body urged the applicants to provide additional information regarding their surveillance arrangements. Notably, BlackRock had initially submitted its spot BTC ETF application on June 15.
The US securities regulator had not granted approval for any spot ETF tied to crypto investments, despite receiving numerous applications from eager market participants as of the time of this publication. In fact, Grayscale Investments, having faced denial for its spot Bitcoin ETF in June 2022, took the drastic step of filing a lawsuit against the SEC. Their grievance alleged that the regulatory body had displayed inconsistent treatment towards similar investment vehicles.