Business 10 September 2018

Paul How

US regulator suspends crypto-linked securities

The U.S. Securities and Exchange Commission (SEC) has temporarily suspended trading in the securities Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF), according to a release.

The commission said there was “confusion amongst market participants” on the two exchange-traded notes (ETNs), which were both incorporated in Sweden under the same address.

“The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company,” the SEC said, adding, “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.”

The suspension will be lifted on September 20, at 11:59 p.m. EDT.

The CBXTF ETN tracks the BTC price in U.S. dollars from the Bitfinex, Bitstamp and GDAX exchanges, which is then converted to Swedish krona (SEK). The CETHF ETN is also denominated in SEK.

Prior to the suspension, the closing price of CXBTF was at $30.30, with a trading volume of 26,549. CETHF closed at $2.16, with a trading volume of 10,306.

An ETN is similar to an exchange-traded fund (ETF), with their share price being linked to a specific asset, in this case, BTC and ETH. When JPMorgan Chase invested in cryptocurrencies in 2017, it did so through the purchase of about €3 million ($3.5 million) worth of ETNs. The investment was seen as contradictory to statements made by the company’s chairman and CEO Jamie Dimon, who once called Bitcoin a “fraud” but has since expressed regret for saying so.

It was only last month that the SEC rejected several applications for ETFs on concerns that these would be vulnerable to fraud and manipulation. Just a day after the order was released, commissioner Hester Peirce, who has dissented from the SEC orders, said that the decisions were to be reviewed, and the rejection stayed.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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