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CBOE Asks SEC to Allow Bitcoin ETFs

The Chicago Board Options Exchange (CBOE) has written to the Securities and Exchange Commission (SEC) to allow crypto exchange-traded funds or ETFs.

In a letter, CBOE which was the first to offer bitcoin futures contracts in December is asking the regulator to treat cryptocurrency ETFs as any other Exchange Traded Products or ETPs.

Bitcoin ETFs

“Cboe encourages the Commission to approach Cryptocurrency ETPs [exchange-traded products] holistically and from the same perspective that it has historically approached commodity-related ETPs,” CBOE says in the letter to the SEC asking it not to stand in the way of ETPs.

The commission is yet to make a response to the letter.

The SEC has previously rebuffed attempts to have cryptocurrency ETFs listed citing reasons such as high volatility in the market.

Dalia Blass who is charge of the investment division said the product has not yet addressed concerns about high volatility and liquidity.

Blass noted there were significant investor protection issues that needed to be addressed before the product could be allowed in her letter of January 2018. The letter also cited the lack of regulation and fragmentation as reasons for the refusal at the time.

However, “while Cboe shares many of the concerns raised in the Staff Letter, we believe 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,” the CBOE wrote in a response to Blass.

Bitcoin ETFs

The letter written by CBOE president Chris Concannon says he expects the volumes to rise in the bitcoin futures markets to levels “comparable”  to other commodity futures markets.

CBOE and CME were the first two exchanges to launch bitcoin futures contracts in December when the cryptocurrency was soaring. About five bitcoin futures contracts are listed around the world. The move was expected to bring  in more money from institutional investors but the value of bitcoin has been on a downward trend ever since.

ETFs offer exposure to certain parts of the market like commodities, bonds or a basket of assets.

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