The U.S. cryptocurrency market has experienced a setback following the suspension by the U.S. Security and Exchange Commission (SEC) of highly touted investment tools meant to attract the American public to crypto trade. The order of suspension of trading was issued against two exchange-traded products offered by XBT Provider AB.
“Confusion” Lead to Suspension
The Sunday announcement by the U.S. Securities and Exchange Commission (SEC) suspending the trading of the Bitcoin Tracker One and Ether Tracker One Exchange-traded notes issued by the Swedish-based subsidiary of U. K based CoinShares Holding, XBT Provider AB, named “confusion amongst market participants” in the United States regarding the nature of the financial vehicles as the reason that informed their decision.
The suspension took effect from 5:30 pm EDT Sunday until Thursday, September 20, 11:59 pm EDT. The order, however, doesn’t affect trading on non-U.S. based exchanges during the suspension period. Citing public interest and protection of investors as the reason for their decision, the press release from SEC read:
“The broker-dealer application materials submitted to enable the offer and sale of these financial products in the U.S., as well as certain trading websites, characterize them as ‘Exchange Traded Funds.’ 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.”
SEC defines the ETFs as investment companies that give investors a vehicle for pooling their money in a fund to invest in bonds, stocks or other assets and from which the investors receive an interest. The commission said the issuer of Exchange-Traded Notes, XBT Provider has characterized them as “non-equity linked certificated” which are not principal protected and don’t beat interest. The company offers Bitcoin Tracker Euro and Ether Tracker Euro besides the Bitcoin Tracker One and Ether Tracker One.
The suspension comes only one month after the two products that have been trading on NASDAQ Stockholm since 2015 entered the U.S. market to court local investors, saying they would be quoted in U.S. Dollars beginning August 15, 2018.
An Entering Wedge
The Exchange-Traded notes were seen by many as a possible soft entering wedge for the U.S. public in contrast to the more sophisticated Exchange-Traded Funds (ETF) that regulators have shot down recently and were described as an easier way for U.S investors to access the cryptocurrency market using their local currency. Coinshare Holding’s CEO Ryan Radloff had said at that time:
“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona.”