US Securities and Exchange Commission seeks advice on CBOE Bitcoin ETF application

The US Securities and Exchange Commission (SEC) has sought public comment on two rule change initiatives, and if approved, will enable the first bitcoin exchange-traded fund (ETF) to go public.

US Securities and Exchange Commission seeks advice on CBOE Bitcoin ETF application

In order to seek public opinion on relevant initiatives, the new document issued by the SEC on December 28 and January 2 publicized the rules change initiative of the Chicago Board Options Exchange (Cboe, Chicago Board OpTIons Exchange) to protect its Bitcoin ETF from Certain market manipulation rules. In the applications submitted on December 15th and December 19th, the changes to the rules involved brokers and consultants who were willing to support the release of related products.

The two documents of the SFC will allow Cboe to list four ETF funds.

In accordance with certain regulatory policies, fund management company consultants must set up a “firewall” between brokers or dealers that may be associated with them. This wall will prevent consultants and brokers from sharing company portfolio information. Other rules prohibit anyone who manages funds from using inside information to increase the value of the funds they hold.

Since it is believed that Bitcoin is unlikely to have the characteristics of a commodity that has the risk of being manipulated under existing rules, Cboe requests a rule exemption and suggests that price manipulation needs to influence the bad guys role of the entire global blockchain.

Similarly, due to the nature of the Bitcoin network and its extensive global infrastructure, it is difficult for anyone to grasp its insider trading information.

Cboe applied to say:

“There is no inside information about revenue, income, company activity or source of supply. The price manipulation of any single location requires the manipulation of global bitcoin prices to take effect. The huge over-the-counter market provides liquidity and shock absorption, and the all-weather characteristics of Bitcoin. Providing continuous arbitrage opportunities to all trading venues, it is impossible for any single object to gain an overwhelming market share."

However, it is unclear whether the existing process will allow Cboe to successfully list any Bitcoin ETF products. The report said that the past efforts to launch the Bitcoin ETF failed, and the SEC rejected some applications or forced other companies to withdraw their applications.

So far, the regulator has not approved any bitcoin ETFs, but it is not clear whether the SEC will reject the application again because there are already two different futures products on the market.

The SEC will accept emails and letter comments within three weeks of the publication of the application in the Federal Register.

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