The U.S. Security and Exchange Commission (SEC) halted trading in Bitcoin Tracker One and Ether Tracker One on Sunday, September 9. According to a statement published on its website, SEC said the securities provided by XBT Provider would be temporarily suspended until Sept. 20 due to confusion whether the products are exchange-traded funds (ETFs).
SEC’s statement read:
“The Commission temporarily suspended trading in the securities CXBTF and CETHF because of confusion amongst market participants regarding these instruments.”
The products which are listed on NASDAQ, track the prices of bitcoin and ether respectively and were recently quoted on OTC Link operated by OTC Markets Group Inc. The SEC argues that the products are positioned as Exchange Traded Funds according to a report by Reuters.
“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 was quoted as saying.
The SEC versus Crypto ETFs
The various episodes of bitcoin ETFs rejections have revealed a reluctance on the path of the SEC to approve crypto-based ETFs. Recently, the staff of the agency rejected 9 proposals from three companies in one day. The decisions were later marked for review, though that did little to restore hopes of an approval.
As the wait for the first SEC approved crypto ETF drags on, investment firms have been floating other types of investment vehicles that aim to ease the trading of cryptocurrency on the stock market. These alternatives are sometimes referred to ETFs though they are not ETFs in the real sense of the term.
While the suspension on Bitcoin Tracker One and Ether Tracker One stands, the SEC warned that brokers who allow customers to trade or offer quotes on the securities could be subject to enforcement actions.