Nasdaq Refiles BlackRock Bitcoin ETF Application, Selects Coinbase as Surveillance-Sharing Partner
In a recent development, the Nasdaq exchange has resubmitted its application to list the proposed bitcoin exchange-traded fund (ETF) by BlackRock. Following the footsteps of other applicants, Nasdaq has now included Coinbase, a prominent U.S. exchange, as the market to be monitored under a surveillance-sharing agreement. This move comes after U.S. securities regulators provided feedback to applicants, stating that the filings were incomplete without disclosing the partner involved in the surveillance-sharing agreements. Such agreements aim to mitigate market manipulation risks.
Several other pending applications, including one submitted by BlackRock’s money-management rival, Fidelity, have also been updated to name Coinbase as their partner for surveillance-sharing agreements. According to the Securities and Exchange Commission’s (SEC) previous rulings, a sponsor of a bitcoin trust must establish a surveillance-sharing agreement with a regulated market of significant size to obtain regulatory approval.
Nasdaq’s recent filing states that the exchange reached an agreement with Coinbase on June 8 for surveillance-sharing. The filing highlights that Coinbase has accounted for approximately 56% of the dollar-to-bitcoin trading volume on U.S.-based platforms year-to-date.
Initially, the June 15 filing for a BlackRock ETF mentioned the requirement of a surveillance-sharing agreement without specifying the exchange partner. However, on Friday, it was reported by the Wall Street Journal, citing anonymous sources, that SEC officials informed representatives of Nasdaq and Cboe that their bitcoin ETF applications were incomplete because they did not disclose the surveillance-sharing partner.
Subsequently, Cboe’s BZX Exchange also named Coinbase as the market for its surveillance-sharing agreement when it resubmitted applications for a spot bitcoin ETF. Cboe is collaborating with potential issuers such as Fidelity, WisdomTree, VanEck, ARK Invest, and Galaxy/Invesco. These money managers are striving to achieve success in launching a bitcoin spot ETF, despite the SEC rejecting such proposals for several years.
Following these developments, shares of Coinbase (COIN) have surged approximately 8% in the past 24 hours. Bitcoin-related stocks have also experienced a significant uptick, with Microstrategy’s stock surging by 35% in the same period.
