Cboe And Coinbase Reach Custody Sharing Agreement For 5 Proposed Bitcoin Spot ETFs

Key Points:

• Coinbase stock rises after retaining surveillance-sharing deal with Cboe for spot Bitcoin exchange-traded fund applications.
• The agreement boosts investor confidence and leads to a 14.5% increase in Coinbase shares.
• Coinbase to monitor market manipulation for proposed ETFs, enhancing regulatory scrutiny.

Coinbase stock rose on Tuesday after the crypto exchange agreed to retain a surveillance-sharing deal with Cboe’s BZX Exchange for five of its spot Bitcoin exchange-traded fund (ETF) applications.

The recent Securities and Exchange Commission (SEC) notification that the Bitcoin ETF applications were insufficiently robust or thorough thrust US-based crypto exchange into the spotlight.

Cboe, a US options exchange, filed revisions to five proposed spot bitcoin ETFs on Tuesday, stating that it had reached an agreement on conditions with Coinbase to join into surveillance sharing arrangements.

According to the latest filing, Cboe and Coinbase struck an agreement on June 21, 2023, based on which the two parties would complete and sign an agreement. Previously, Blackrock, the world’s biggest wealth manager, and the exchange established a surveillance sharing agreement (SSA). Several firms, including Valkyrie, Bitwise, Invesco, and WisdomTree, have also filed for Bitcoin ETF clearance.

“On June 21, 2023, the Exchange reached an agreement on terms with Coinbase, Inc., an operator of a United States-based spot trading platform for Bitcoin that represents a substantial portion of US-based spot trading platform for Bitcoin that represents a substantial portion of US-based and USD denominated Bitcoin trading, to enter into a surveillance-sharing agreement (“Spot BTC SSA”) and executed an associated term sheet,” according to the filing.

As a result, the Coinbase stock price increased sharply on Tuesday, despite the fact that the broader financial markets remained essentially flat ahead of the consumer price index (CPI) report. The company’s shares jumped 14.5% after it was revealed that trading giant Cboe would depend on the crypto exchange to monitor market manipulation for proposed exchange-traded funds to be listed on its platform.

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