The regulator has pointed out that the exchange-traded notes (ETNs) lacked enough information to be considered viable on the US market. This is after the Swedish firm XBT Provider AB (a subsidiary of Coinshares Holdings) issued them to the market last month.
The order was made on Sunday after the U.S. Securities and Exchange Commission (SEC) evaluated the two products and found them wanting. This order means that the trading in Ether Tracker One (CETHF) and Bitcoin Tracker One (CXBTF) are suspended till further notice. The two investment products are aimed to track cryptocurrencies.
Before the warning, the two products were listed on Nasdaq Stockholm exchange for the past three years and were just introduced to the US market last month as CXBTF. The listing enables investors in the country to access and invest in the ETNs in an over-the-counter agreement using dollars.
The Securities and Exchange Commission announced the temporary suspension of trading in the securities Bitcoin Tracker One (“CXBTF”) and Ether Tracker One (“CETHF”) commencing at 5:30 pm EDT Sept. 9, 2018 and terminating at 11:59 pm EDT Sept. 20, 2018. https://t.co/5z1vEYFBFB
— SEC_News (@SEC_News) September 9, 2018
The application materials between the broker and the dealer aimed at selling the financial products in the US, as well as a few trading websites globally. The materials characterize the products as “Exchange Trade Funds”, as elaborated by the SEC when making the final order. However, SEC pointed out that other public sources categorize the instruments as ETNs. However, after evaluation, the regulators characterize the materials as “non-equity linked certificates.”
Due to this, the regulator has seen it vital that to protect investors and the rest of the public, the trading in the securities get suspended, awaiting further evaluation.
Furthermore, the move is attributed to what the SEC claims to be “confusion among market participants”, which led to the halt. This announcement came into force at 1730 EDT, Sunday, September 9 and is expected to last till September 20th, 11.59 EDT.
We wait to see what will happen come that date, but till then, the trading of these securities is suspended so don’t be surprised if you don’t see them on the US market.