Cboe Refiles ETF Applications, Designating Coinbase as Surveillance Partner

Coinbase is now identified as the surveillance-sharing collaborator for Cboe’s BZX Exchange as Cboe refiled its applications for spot bitcoin exchange-traded fund (ETF) for multiple hopeful bitcoin ETF issuers.

This move follows recent filings for spot bitcoin ETFs by Fidelity, WisdomTree, VanEck, ARK Invest, Galaxy/Invesco, and BlackRock, each seeking to introduce a product that the U.S. Securities and Exchange Commission (SEC) has consistently turned down. Despite BlackRock’s partnership with Nasdaq, the remaining firms are coordinating with Cboe.

Last Friday, the SEC informed both Nasdaq and Cboe that their applications were falling short, citing their failure to identify the market collaborating on their surveillance-sharing agreements, as reported by the Wall Street Journal.

Upon refiling, Cboe highlighted that Coinbase’s platform accounts for a significant share of U.S.-based and USD-denominated Bitcoin trading, establishing it as a key partner in the surveillance-sharing arrangements. As stated in the filing, the Spot BTC Surveillance-Sharing Agreement (SSA) will likely follow the pattern of a surveillance-sharing agreement between two members of the Intermarket Surveillance Group (ISG). This will provide the Exchange with supplementary access to data related to spot Bitcoin trades on Coinbase if deemed necessary for its surveillance program.

Previously, the SEC has insisted on the necessity of surveillance-sharing agreements with markets of notable size to thwart market manipulation and protect consumers, leading to the rejection of several bitcoin ETF applications.

Yet, the SEC has not formally confirmed the commencement of the application reviews. Upon acknowledging, the SEC will initiate a 45-day review period that will be documented in the Federal Register, but it can be extended up to a total of 240 days.