SEC to Engage Firm for Cryptocurrency Tracing, Seeks Comments on Bitcoin ETF Applications

The SEC plans to hire a technology company to focus on blockchain, cryptocurrency monitoring, among other responsibilities. According to the SEC’s request, the company will, among other duties, trace individual addresses, wallets, and contracts provided by SEC staff; assist the SEC with performing cryptocurrency tracing and analysis; and provide SEC staff with on-demand access to tracing capabilities at the request of the SEC. Meanwhile, the SEC is seeking public comment on the Cboe BZX Exchange, Inc.’s application to list and trade shares of two Bitcoin ETFs. The funds generally intend to invest substantially all of their assets in Bitcoin futures contracts. Similar applications have been filed by NYSE Arca. To date, the SEC has not approved a cryptocurrency ETF. The Division of Investment Management has strongly discouraged fund sponsors from attempting to file registration statements for cryptocurrency related products. The Wall Street Journal is also reporting that Coinbase, a cryptocurrency firm, is in talks with the SEC regarding possible registration of its business as a licensed brokerage and electronic-trading venue.