• An investment manager with $1 billion in assets under management (AUM) is naming Coinbase as its surveillance-sharing partner for a spot Bitcoin (BTC) Exchange-Traded Fund (ETF).
• Valkyrie updated their filing after the U.S. Securities and Exchange Commission (SEC) rejected its previous attempts for failing to meet regulatory requirements.
• Surveillance-sharing agreements are considered a standard market practice for reducing fraud and market manipulation, which could be key to the regulator’s approval for Valkyrie’s spot Bitcoin ETF.
$1 Billion Asset Manager Names Coinbase As Surveillance Partner
An investment manager with $1 billion in assets under management (AUM) has named Coinbase as its surveillance-sharing partner in an application to list a spot Bitcoin (BTC) exchange-traded fund (ETF) on the Nasdaq stock exchange. The move is part of an effort by Valkyrie to meet regulatory requirements set by the U.S. Securities and Exchange Commission (SEC), which previously rejected their attempts due to lack of compliance standards preventing fraudulent acts and protecting investors.
Surveillance Sharing Agreements
Surveillance-sharing agreements are a standard market practice used to reduce fraud and market manipulation, as well as one of the primary reasons that the SEC cites when rejecting spot Bitcoin ETF applications. In new documents submitted on Wednesday, Valkyrie stated that Nasdaq executed a term agreement with Coinbase, which accounts for over 50% of the market share of BTC-USD spot trading volume. The firm believes that this agreement could be key to gaining approval from the SEC for its spot Bitcoin ETF listing request.
SEC Requests Clarification From Other Firms
The SEC also recently asked firms such BlackRock and Fidelity seeking approval for their own spot Bitcoin ETF applications to clarify certain parts of their filings before they can gain approval from regulators.
What Is An Exchange Traded Fund?
An exchange traded fund is an investment vehicle designed to track an index or basket of investments, typically mirroring a particular asset class such as stocks or bonds.. These funds often trade at prices close to net asset value, making them attractive investments for those looking for diversification without having to buy individual securities directly from exchanges or other financial institutions.. Investors can buy into these funds through brokerages or retirement accounts like 401(k)’s or IRAs with little cost associated with each transaction.
Conclusion
Valkyrie’s decision to name Coinbase as its surveillance-sharing partner signals that it may have better luck at gaining approval from regulators than past failed attempts by other firms hoping to launch their own spot Bitcoin ETFs on the Nasdaq stock exchange. It remains unclear if this will be enough for Valkyrie’s application but it does show that they are taking steps towards meeting regulatory demands set forth by the SEC in order for their product offering can gain access into larger markets where institutional investors have greater presence
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