The regulator pointed to “a lack of current, consistent and accurate
information” in the two crypto investment vehicles issued by Swedish
firm XBT Provider AB following their entry into the US market last
month.
The U.S. Securities and Exchange Commission (SEC) on Sunday issued an
order to halt the trading in Bitcoin Tracker One (CXBTF) and Ether
Tracker One (CETHF), two investment products that track
cryptocurrencies. The two exchange-traded notes (ETNs) are issued by
Swedish company XBT Provider AB, a subsidiary of U.K.-based Coinshares
Holdings.
The two products have been listed on the Nasdaq Stockholm exchange since 2015 and entered the U.S. market last month under the ticker CXBTF, enabling domestic investors to
access and invest in the crypto ETNs in an over-the-counter (OTC) market
with their U.S. dollars.
“The broker-dealer application materials submitted to enable the
offer and sale of these financial products in the United States, as well
as certain trading websites, characterize them as ‘Exchange Traded
Funds’,” the SEC elaborated, explaining its decision in its official order.
“Other public sources characterize the instruments as ‘Exchange Traded
Notes.’ By contrast, the issuer characterizes them in its offering
materials as “non-equity linked certificates.’”
The regulator said:
“The Commission is of the opinion that the public
interest and protection of investors require a suspension of trading in
the securities of the above-quoted company.”
The SEC claimed the ETNs’ presence in the U.S. market resulted in
“confusion amongst market participants”, resulting in the temporary
halt. The suspension commenced at 1730 EDT on Sunday, September 9 and
will last until 11:59 EDT on September 20.
A representative for CoinsShares wasn’t immediately available for comment at press time.
