$1,000,000,000 Asset Manager Names Coinbase Surveillance Sharing Partner in Updated Spot Bitcoin ETF Filing
An investment manager with $1 billion in assets under management (AUM) names Coinbase as its watch-sharing partner in a filing to list a spot bitcoin (BTC) exchange-traded fund (ETF) on the Nasdaq exchange.
Valkyrie updated its filing after the US Securities and Exchange Commission (SEC) rejected its earlier attempts for failing to meet regulatory requirements to prevent fraud and protect investors.
Monitoring agreements are considered common market practice to reduce fraud and market manipulation. This is also one of the top reasons the SEC cites for rejecting spot bitcoin ETF applications.
In new documents filed Wednesday, Valkyrie says Nasdaq has already entered into a temporary agreement to enter into a monitoring sharing agreement with Coinbase, which accounts for over 50% of the BTC-USD spot trading volume market share.
“On June 30, 2023, the exchange signed a term sheet with Coinbase to complete a spot BTC SSA. Based on this Agreement, the Exchange and Coinbase will enter into and execute a Definitive Agreement, which the parties expect to be executed before trading in the Commodity-Based Trust Shares is permitted. Trading bitcoin on Coinbase accounts for a significant portion of bitcoin trading in the US.”
The move could be key to regulator approval of Valkyrie’s spot bitcoin ETF. The SEC also recently told the Nasdaq and the Chicago Board Options Exchange (CBOE) that investment firm BlackRock and Fidelity’s spot bitcoin ETF filings were unclear and incomprehensible.
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