Cboe to Reach Agreement with Coinbase on Bitcoin Market Surveillance, Coinbase Stock Rises

Cboe Global Markets on Tuesday filed amended applications to list and trade spot bitcoin exchange-traded funds (ETFs), including one from Fidelity. The move was made in an effort to promote a surveillance-sharing agreement with cryptocurrency trading platform Coinbase.

Coinbase's shares closed up 9.8 percent on Tuesday, reaching their highest level since last August.

The U.S. Securities and Exchange Commission (U.S. SEC) has rejected dozens of spot bitcoin ETFs in recent years, often because the exchanges' proposals don't meet the standards to prevent fraud and manipulative activities aiming to protect investors and the public interest.

To meet the standards, the SEC said, an exchange can demonstrate that it has "a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets."

Nasdaq resubmitted its application to the SEC on June 29 for the listing of a spot bitcoin ETF from BlackRock, the world's largest asset manager, which also includes a surveillance-sharing agreement with Coinbase.

Cboe had previously said it hoped to reach that agreement with Coinbase, and the move attracted about half of U.S. dollar-bitcoin trading in May.

Last month, the SEC sued Coinbase for failing to register as an exchange and evading disclosure requirements designed to protect investors. It was part of the regulator's crackdown on cryptocurrency intermediaries.

In a letter to a Manhattan federal court last month, Coinbase said it will ask a judge to toss the SEC's lawsuit, arguing that the regulator did not have the authority to bring a civil suit because crypto-asset trades on its platform are not "investment contracts," and therefore not securities.

(Source: Reuters)