The shares of Coinbase, the largest U.S. platform for cryptocurrencies, increased 13% on Monday, after exchange operator Cboe announced that it was collaborating with the cryptocurrency startup in its effort to develop a spot bitcoin exchange-traded fund.
The U.S. Securities and Exchange Commission received a new application from Cboe on Friday to start a bitcoin exchange-traded fund managed by Fidelity. In that filing, Coinbase was identified as the cryptocurrency platform that would assist the exchange in policing ETF manipulation.
According to a person familiar with the situation, Cboe wanted to allay SEC worries that its initial filing did not identify the crypto-trading platforms that would aid it in identifying fraud in the underlying bitcoin markets.
In relation to a similar recent registration for a spot bitcoin ETF from BlackRock, the SEC had also voiced similar concerns to Nasdaq, the source claimed.
Numerous applications for spot bitcoin ETFs have been turned down by the SEC in recent years because they didn’t adhere to the requirements set forth to safeguard investors from fraud and market manipulation. The ETF sector is looking for a solution to that issue.
The value of Coinbase’s shares has more than doubled this year and on Monday they closed up 11.7% at $79.93.
Following the filing of BlackRock and Fidelity to introduce bitcoin ETFs, the value of Bitcoin, the largest cryptocurrency in the world, increased to a level not seen in more than a year.
The SEC filed those documents a few weeks after accusing Coinbase and Binance of breaking the law as part of a broad regulatory crackdown on the digital asset market. The two contest the charges.