SEC Temporarily Halts Bitcoin Tracker One, Ether Tracker One Trading in US

The exchange-traded products linked with Bitcoin and Ethereum will not be available to US investors for twelve days, starting on Monday morning UTC.

Due to investor concerns, the US Securities and Exchange Commission (SEC) has issued an order that temporarily suspended trading in two cryptocurrency-related financial instruments, Bitcoin Tracker One and Ether Tracker One. The regulator said on Sunday the freeze would be in force for US brokers and dealers from the early morning UTC on Monday until 04:00 UTC on September 21.

Bitcoin Tracker One and Ether Tracker One are listed on the NASDAQ Stockholm Exchange in Sweden as CXBTF and CETHF, respectively. Both instruments, owned by XBT provider AB, are available as foreign over-the-counter (OTC) products to United States investors because they get quotes in US dollar. The SEC decision does not affect investors outside of the US.

“The Commission temporarily suspended trading in the securities CXBTF and CETHF because of confusion amongst market participants regarding these instruments… If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action,” the regulator stated in the order.

CXBTF and CETHF are a type exchange-traded products (ETPs) called exchange-traded notes (ETNs). XBT provider AB is a Swedish subsidiary of UK-based CoinShares Holdings. The company also offers another group of Bitcoin (BTC) and Ethereum (ETH)-linked instruments on the NASDAQ Stockholm Exchange - Bitcoin Tracker Euro and Ether Tracker Euro.

The Bitcoin Tracker One became available for US trading in mid-August and sparked great enthusiasm among US crypto investors given the SEC’s rejection of applications for exchange-traded funds (ETFs). Ether Tracker One has also got quotes in US dollars, according to AB’s website.

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona. Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin,” CoinShares CEO Ryan Radloff told Bloomberg in August.

An ETN is a debt instrument backed by its investors, while an ETF is backed by an asset pool. ETNs are considered a soft version of the far more popular ETFs, according to Fundstrad analyst Thomas Lee.