CBOE Recommends That The SEC Allows Bitcoin Exchange-Traded-Funds
March 27 2018 - 4:43AM
ADVFN Crypto NewsWire
The exchange operator of CBOE Global Markets wrote a letter to the
US Securities and Exchange Commission
(SEC), recommending they not interfere in the development of a
Bitcoin exchange-traded-fund (ETF) because they
are similar to other commodity-based ETFs, March 23.
ETFs are a type of exchange-traded-product (ETP). An
ETF is a marketable security that tracks an index, a commodity,
bonds, or a basket of assets like an index fund. ETFs trade like
common stock on a stock exchange and typically have higher daily
liquidity and lower fees than shares of mutual funds.
CBOE President Chris Concannon’s letter was in written
response to a letter issued by the SEC in
January 2018 in which, among other concerns, the SEC expressed
disquiet over sufficient liquidity in cryptocurrency markets, as well as
potential risks for manipulation.
Concannon stated that, “As the volumes continue to
grow, especially on regulated US markets, the overall spot Bitcoin
market looks more and more like a traditional commodity market and
CBOE continues to believe that the spot market is sufficiently
liquid to support a Bitcoin ETP.”
Concannon added that, “...CBOE believes that the
arbitrage mechanism would function identically to other
commodity-related ETPs… thereby keeping the price of the ETP in
line with the price of Bitcoin and limiting the risk of
manipulation shares of the ETP.”
Concannon echoed sentiments from a Congressional hearing
earlier this month, in which experts suggested that existing
legislation is sufficient to regulate certain aspects of
cryptocurrencies.
“While CBOE shares many of the concerns raised in the
Staff Letter, we believe that the vast majority of these concerns
can be addressed within the existing framework for
commodity-related funds related to valuation, liquidity, custody,
arbitrage, and manipulation,” Concannon wrote in his letter to
Dalia Blass, a Director of the Division of Investment
Management.
The SEC has been stepping up measures against
crypto-related companies this year. On March 15 the SEC confirmed dozens of probes into
cryptocurrency companies, issuing subpoenas to firms it suspects of
flouting securities laws during initial coin offerings (ICO).
Earlier this week, a source speaking to WSJ said
that the SEC will increase its scrutiny in launching examinations
into up to 100 hedge funds.
By Aaron Wood
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