The US Securities and Exchanges Commission (SEC) initiated a suspension of its cryptocurrency-based Exchange-Traded Notes (ETN). But do not worry, it's only temporary.
In an announcement made yesterday, the SEC declared a suspension of trading in ETN securities known as Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF).
It appears that this temporary ban has been instigated because there is still much confusion in the market compared to these trading instruments.
"The Commission temporarily suspended trading in the CXBTF and CETHF securities due to the confusion among market participants regarding these instruments, which was entered under Section 12 (k) of the Securities Exchange Act of 1934 ( Exchange Act). "
The pause in trading will last until September 21st. So anyone interested in exchanging these cryptocurrency ETNs can do so from that date.
An ETN is a form of debt security. It is not safe, which means that it is not supported by an equal guarantee value, and is non-subordinate, which means it is more prior to other types of security.
Buying an ETN will buy an agreement that the seller will pay at regular intervals based on the value of the asset to which ETN is linked. In this case Bitcoin BTC or Ethereum.
Although ETNs should not be confused with ETFs (Exchange-Traded Funds), since they are subtly different products.
As Invetopedia says: "ETNs are structured products issued as senior debt securities, while ETFs represent a stake in an underlying commodity ETNs are more like bonds because they are not guaranteed. a fund that holds assets that track, such as stocks, bonds or gold. "
Although ETN is long-standing trading instruments, it would appear that the SEC still needs more time to clarify exactly how CXBTF and CETHF should work .
This news brings another obstacle to the market due to the continued involvement of the SEC in the cryptocurrency space. Even if the markets have a history of understanding these things.
In fact, the SEC once declared that Ethereum was too decentralized to be classified as security. Despite this, the market managed to break into cryptocurrency trading through the use of ETNs.
Published 10 September 2018 at 10:42 UTC