US Securities and Exchange Commission Suspends Trading in OTC Listed Ether Tracker One & Bitcoin Tracker One

The Securities and Exchange Commission (SEC) issued a temporary suspension of trading of two cryptocurrency related securities. Both the Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF) traded on OTC Markets saw trading halted as ordered by the SEC.

The temporary suspension went into effect on September 9th and is expected to end on September 20th – pending any further announcements by the SEC. Both securities were issued by Xbtrovider (a Coinshares Company) based in Sweden. The securities allowed “simple access to Bitcoin and Ether.”

The Order of Suspension from the SEC stated;

“It appears to the Securities and Exchange Commission (SEC) that there is a lack of current, consistent and accurate information concerning Bitcoin Tracker One (Ticker Symbol: CXBTF) and Ether Tracker One (Ticker Symbol: CETHF), issued by XBT Provider AB (publ), a Swedish company headquartered in Stockholm, resulting in confusion amongst market participants regarding these financial instruments. 

For example, the broker-dealer 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.” 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.” CXBTF and CETHF are listed and trade on the NASDAQ/OMX in Stockholm and have recently been quoted on OTC Link (previously “Pink Sheets”) operated by OTC Markets Group, Inc.”

As the securities are listed on other trading platforms, such as the NASDAQ Nordic, the Order noted that a broker dealer may still continue to assist non broker dealers with the “liquidation of owned positions.”

Bitcoin Tracker One has traded in Sweden since May of 2015. Ether Tracker One commenced trading in Sweden in October of 2017. Both report being the first publicly traded Ether / Bitcoin based securities listed on a public exchange.

Questions regarding price manipulation for much of the cryptocurrency market have been prevalent for some time. The SEC recently denied the creation of a Bitcoin ETF due, in part, to questions regarding price manipulation.

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