sec 800x500 - SEC Suspends Bitcoin and Ethereum ETNs

SEC Suspends Bitcoin and Ethereum ETNs

The U.S. Securities and Exchange Commission (SEC) has suspended two Bitcoin and Ethereum exchange-traded notes (ETNs). The products are known as Bitcoin Tracker One (CXBTF) and Ethereum Tracker One (CETHF). The suspension is immediate and will last until September 20th; or as noted later on.

SEC Suspends Crypto ETNs

The temporary suspension was conducted pursuant to Section 12(k) of the Securities Exchange Act of 1934. According to this section, the SEC has the power to stop the activities of any security if it considers there is an emergency. If the President of the United States considers that the suspension should be longer, it could be extended for a period of 90 calendar days.

As per the statement released by the SEC, the decision to suspend trading in both ETNs is because of ‘confusion amongst market participant regarding these instruments.’

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These instruments gave investors the possibility to enter the cryptocurrency market. Additionally, in order to do so, they did not have to purchase the physical asset.

Both ETNs are regulated and listed in Sweden and traded on the Nasdaq Stockholm Exchange. ETNs are symbolics of debt that the issuer supports, allowing the owner to have exposure to the virtual currency market.

The Release No. 84063 released by the SEC reads as follows:

“The Commission temporarily suspended trading in the securities CXBTF and CETHF because of confusion amongst market participants regarding these instruments. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).”

Both, Bitcoin and Ethereum lost between 1.5% and 3% of their price respectively, right after the SEC announced this information.

The real effect in the market of these products might be minimal by itself, but it follows a pattern of concern from U.S. regulatory agencies. However, it shows that the SEC is actively controlling the market and trying to create good financial practices.

Additionally, the SEC said that no broker or dealer should enter into a quotation if they do not have the provisions that are set in Rule 15c2-11 under the Exchange Act.

“If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action,” stated the SEC.

 

Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

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