Hours after ‘explosive’ WSJ report, Cboe dumps Bitcoin ETFs

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Cboe filed five spot bitcoin ETF proposals on Friday, following reports that the SEC had requested more information.

The Wall Street Journal had reported this morning that previous filings were inadequate, a characterization that appeared to lead to a loss of confidence in the cryptocurrency earlier in the day. However, on closer reading, the WSJ report simply noted that the SEC wanted updated language and details and had made no decision on the merits of the ETF’s requests.

The filings, in their second iteration, named Coinbase as part of the oversight sharing agreement for ETF apps Wise Origin, WisdomTree, VanEck and Invesco Galaxys.

Ark tapped Coinbase Custody Trust Company, LLC, a third-party regulated custodian (the Custodian), will be responsible for the safekeeping of bitcoin Trusts according to its deposit.

The updated document stated that the product, The Spot BTC SSA, would have the characteristics of a surveillance sharing agreement shared between two parties. This setup would allow additional access to data regarding spot Bitcoin transactions on Coinbase if the Exchange deems it necessary as part of its oversight program, according to the filing.

Other refiled applications contained similar language and related updates.

The SEC told representatives from Cboe and Nasdaq that the filings lacked sufficient detail to appease regulators, The Wall Street Journal reported. Among those details, it seems, is the lack of information about surveillance sharing agreements with bitcoin exchanges designed to protect ETF products.

The updated filings come after Wall Street firms rushed to file or in some cases re-file bitcoin ETF proposals following BlackRocks’ June 15 filing.

BlackRock also plans to use Coinbase as a crypto custodian.

The deposits come a day after Fidelity deposited its spot bitcoin ETF.

The flurry of filings contains the same language: around supervisory sharing agreements in hopes that the SEC will greenlight a bitcoin spot ETF.

Updated June 30, 2023 5:37 PM ET: context added throughout.

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