Coinbase Shares Rise 13 Percent After Cboe Mentions Crypto Exchange in Bitcoin ETF Application

Shares of Coinbase, the largest U.S. cryptocurrency platform, jumped 13 percent on Monday after exchange operator Cboe said it was working with the crypto company in its effort to launch a spot bitcoin exchange-traded fund.

Cboe on Friday refilled an application with the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin exchange-traded fund by asset manager Fidelity. In that filing, it named Coinbase as the crypto platform that would help the exchange police manipulation in the ETF.

Cboe sought to address SEC concerns that its original filing did not name the crypto-trading platforms that would help it detect fraud in the underlying bitcoin markets, Reuters reported citing a person familiar with the matter.

The SEC had also raised the same concerns with Nasdaq over a similar recent filing for a spot bitcoin ETF from BlackRock, the person said.

The SEC has rejected dozens of spot bitcoin ETF applications in recent years, saying they did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors. The ETF industry is trying to find a way to address that concern.

Coinbase shares closed up 11.7 percent at $79.93 (roughly Rs. 6,600) on Monday, and have more than doubled this year.

Bitcoin, the world’s largest cryptocurrency, jumped to a more than one-year high last month after BlackRock and Fidelity filed to launch bitcoin ETFs.

Those filings came weeks after the SEC sued Coinbase and Binance, alleging violation of its rules, in a significant regulatory crackdown on the digital asset sector. The pair deny the allegations.

Bitcoin was trading at $31,029 (roughly Rs. 25,44,500), up 1.32 percent while Ethereum, the world’s second-largest cryptocurrency, rose 1.94 percent to $1,964 (roughly Rs. 1,61,100).

© Thomson Reuters 2023

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