CBOE Global Markets and its exchange operator have written a letter to the U.S. Securities and Exchange Commission “recommending that they not interfere in the development of a Bitcoin exchange-traded fund because they are similar to other commodity ETFs,” Cointelegraph reports.
An ETF is a type of exchange-traded product, or ETP. It can be deifned as a marketable security that “tracks an index, a commodity, or a basket of assets” in the same way as an index fund. They trade like the stocks on a standard stock exchange and are characterised by having higher liquidity on a daily basis and lower fees than you would pay for mutual funds.
CBOE’s letter was in response to one sent out by the SEC in January that expressed its concerns over a number of areas, including sufficient liquidity in the cryptocurrency markets. The SEC also suggested that there was a potential risk in market manipulation.
CBOE said in its letter: “As the volumes continue to grow, especially on regulated US markets, the overall spot Bitcoin market looks more and more like a traditional commodity market and CBOE continues to believe that the spot market is sufficiently liquid to support a Bitcoin ETP.”
It also believes that the existing arbitrage mechanism will function just the same as for non-crypto ETPs and drew on the recent statement from Congress, which claimed that existing legislation is enough to regulate aspects of cryptocurrencies for the moment.
We have noted before that the SEC is increasing its interest in crypto-connected companies and stepping up measures to bring them under tighter control. It has been investigating a number of companies and has issued subpoenas to those startups it believes may be breaching securities laws during their ICOs. It is also rumoured in the Wall Street Journal that the SEC intends to expand its probing into the crypto world and may launch an investigation into at least 100 hedge funds with crypto connections.