BlackRock’s (BLK) iShares Bitcoin Trust application to the U.S. Securities and Exchange Commission (SEC) this week might stand a better chance than previous attempts by other fund managers due to the promise of a “surveillance-sharing agreement” between exchanges. According to the 19b-4 filing with the SEC, the company states that to mitigate against market manipulation, it will bring in Nasdaq (NDAQ) to enter into a surveillance-sharing agreement with an operator of a spot trading platform for Bitcoin (BTC). This agreement, dubbed the “Spot BTC SSA,” is what makes this application different, and not simply the company’s size as the largest asset manager in the world, said Graeme Moore, Head of Tokenization, Polymesh Association.
The SEC has previously highlighted the importance of a surveillance-sharing agreements. In a notice in January regarding Cboe Digital’s request to list and trade shares of the ARK 21Shares Bitcoin ETF, agency officials said that “an exchange that lists bitcoin-based ETPs can meet its obligations under Exchange Act Section by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets.”
Industry veteran Dave Weisberger, CEO & Co-Founder of CoinRoutes, countered that any such surveillance-sharing agreement is superfluous. “Why should it be necessary?” Weisberger said in an interview with journalists. “Because Kraken, Coinbase, ItBit, Lmax and Bitstamp — all of their data feeds are public,” he added. “The SEC could clearly get all this data or hire someone to feed it to them. You can know every trade in every order, and that will give the SEC the ability to say, ‘Hey, this looks like a manipulative trade. So who did it?’”
BlackRock’s iShares filed paperwork with the SEC on Thursday afternoon for the formation of a spot bitcoin ETF. The move comes after several other ETF proposals, including those of Grayscale, VanEck, and WisdomTree have previously been rejected. The promise of a surveillance-sharing agreement between exchanges may be what sets BlackRock’s application apart from the rest.