The revised filing is likely to help BlackRock win SEC approval, even if it does raise a few eyebrows.
All eyes have been on BlackRock over the past few weeks as the investment giant takes the lead in the litany of spot Bitcoin ETF filings. BlackRock’s proposed ETF, the iShares Bitcoin Trust, plans to list on the Nasdaq stock exchange, sparking huge optimism among investors.
The Wall Street Journal reported on Friday however that the US Securities and Exchange Commission (SEC) has been unsatisfied with the slew of filings because they do not name the crypto exchanges they intend to share a surveillance-sharing agreement (SSA) with.
Accordingly, a June 29 filing shows that Nasdaq has revised BlackRock’s 19b-4 application formally designating Coinbase as its SSA partner.
In sum, an SSA is a formal agreement between exchanges/trading platforms and regulatory authorities, such as the SEC. They typically facilitate the sharing of relevant data and information, such as trading activity and customer identification, in order to prevent potential market manipulation and illicit activity.
The partnership has raised some eyebrows, though.
The SEC and Coinbase have an incredibly strained relationship. On June 6, the Commission sued Coinbase for allegedly trading unregistered securities.
Coinbase CEO Brian Armstrong has also been a vocal critic of the SEC’s enforcement-as-regulation tactics and at one point threatened to the move the Coinbase HQ to the UK if regulators failed to provide clarity.
BlackRock isn’t the only asset manager to list Coinbase as its SSA partner. Last week, Cboe refiled four Bitcoin ETF applications (Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, Wise Origin Bitcoin Trust, and WisdomTree Bitcoin Trust) also naming the exchange as its intended partner.
BlackRock however stands out. It’s the world’s largest asset manager with a monumental $10 trillion assets under management.
The revised filing comes after ARK Invest, another asset manager, revised its filing to include an SSA. ARK is confident that if the US Securities and Exchange Commission (SEC) approves any Bitcoin ETFs, they’re first in line.
ARK filed their most recent ETF application two months before BlackRock.
Despite uncertainty over how the SEC will receive Coinbase as an SSA partner, there’s reason to be hopeful. BlackRock’s approval history of ETF approvals is overwhelmingly positive, with 575 approvals to just 1 rejection.
Executives also remain optimistic. Circle CEO Jeremy Allaire said at the Bloomberg World Economic Forum last week that “progress is being made” with building market structures that can support something like a Bitcoin ETF. He added, “You have mature spot markets, well-regulated custody infrastructure, and good market surveillance.”
Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, similarly expressed optimism, stating that surveillance agreements will help the SEC feel “more comfortable” with the concern of market manipulation.
He pointed out that the SEC previously approved Futures ETFs, which are also based on spot prices, because they share relevant information with the SEC.
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