Valkyrie Investments has resubmitted its application for a spot-Bitcoin exchange-traded fund (ETF), making amendments to address the concerns raised by the Securities and Exchange Commission (SEC). The recent applications sent back by the SEC have all been amended and refiled, including Valkyrie Investments’ application. As part of the amendments, Valkyrie Investments has declared Coinbase as the exchange that will serve as its surveillance-sharing partner. This move is significant and indicates a possible shift in sentiment among regulators and the traditional financial industry.
Nasdaq and Cboe Global Markets Partner with Coinbase
In order to meet the SEC’s requirements for surveillance-sharing agreements (SSA), Nasdaq and Cboe Global Markets have entered into an agreement with Coinbase. Both stock exchanges have chosen Coinbase to fulfill the regulator’s surveillance requirements. The Nasdaq filings state that on June 30, 2023, the exchange executed a term sheet with Coinbase to enter into a surveillance-sharing agreement (“Spot BTC SSA”). The SEC had previously sent back the applications, requesting more clarity regarding the surveillance-sharing partner. The exchanges initially filed the applications without specifying a partner and instead mentioned the Chicago Mercantile Exchange as the SSA partner, which operates a Bitcoin futures market. However, the SEC wanted the applications to specify a spot Bitcoin exchange as the surveillance-sharing partner.
Shifting Stance of Valkyrie Investments
Valkyrie Investments’ filing represents a significant shift in the company’s stance towards spot Bitcoin ETFs. Previously, the company operated Bitcoin-related funds based on futures and did not expect the SEC to approve a spot ETF until crypto exchanges were brought under regulatory oversight. However, the recent filing with Coinbase as the surveillance-sharing partner indicates a change in sentiment. This shift could be indicative of changing attitudes among regulators and the traditional financial industry.
Valkyrie Funds CEO Leah Wald has previously stated that the SEC rejected spot ETF applications due to the lack of regulation and investor protection mechanisms in crypto exchanges. Wald emphasized that until these issues are addressed, the regulator is unlikely to approve any products based on spot-Bitcoin prices. She also acknowledged the challenge of putting an unregulated asset into a regulated wrapper. However, the recent application by Valkyrie Investments contradicts this narrative, as the crypto industry remains largely unregulated.
Valkyrie Investments has resubmitted its spot-Bitcoin ETF application with Coinbase as its surveillance-sharing partner. This amendment addresses the SEC’s concerns and reflects a potential shift in sentiment among regulators and the traditional financial industry. Nasdaq and Cboe Global Markets have also partnered with Coinbase to fulfill the regulator’s surveillance requirements. While the crypto industry continues to face challenges in gaining regulatory approval, Valkyrie Investments’ filing indicates a willingness to explore the possibility of a spot Bitcoin ETF.