CBOE Urges the U.S Securities and Exchange Commission to Allow Bitcoin Exchange-Traded-Funds

Last year in December 2017, the CBOE and CME Group launched first-of-its-kind Bitcoin futures contracts that kicked off very allowing traders to bet on Bitcoin prices without actually buying the cryptocurrency. Since then, there has been a lot of talk regarding another Bitcoin product - the Exchange-Traded-Funds (ETFs) - the proposal for which has been rejected multiple times by the U.S Securities and Exchange Commission.

This time, CBOE President - Chris Concannon has personally urged the SEC in order to seriously consider and allow the Bitcoin-ETFs to be traded on the open market. To make his recommendation sound legit, Concannon has even produced data collected by the firm since the launch of Bitcoin Futures Contracts and says that the market is moving in a direction to be able to offer support for ETFs.

“As the volumes continue to grow, especially on regulated U.S. 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 (exchange-traded-products),” said Concannon.

Back in January 2018, the SEC said that there are “significant investor protection issues” that need to be addressed and examined before the ETFs could come to market. It also said that the agency holds concerns on how the product should be priced, stored and safeguarded.

Concannon wrote a letter supporting the Congressional Hearing earlier this month, where experts said that the existing regulations are sufficient enough to regulate certain aspects of cryptocurrency. In a letter to SEC on March 23rd, CBOE President Chris Concannon says that the firm believes “that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation.”

In this letter, he further added that: “While the current bitcoin futures trading volumes on CBOE Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100% long or short exposure to bitcoin, CBOE expects these volumes to continue to grow and in the near future reach levels comparable to those of other commodity futures products at the time that they were included in ETPs.”

The SEC has been recently seen stepping up measures to deal with cryptocurrency operations. The agency has recently issued subpoenas to its firms where it suspected a few firms flouting of security laws during ICOs.

Earlier this month, the agency also made it mandatory for exchange operators to get registered with them. The commission said that "If a platform offers trading of digital assets that are securities and operates as an 'exchange,' as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”