SEC Suspends Bitcoin Tracker One and Ether Tracker One

Two cryptocurrency-related securities were temporarily suspended by the US Securities and Exchange Commission (SEC), the agency announced on Sunday (September 9).

According to release no. 84063, the SEC froze securities Bitcoin Tracker One (OTC:CXBTF) and Ether Tracker One (OTC:CETHF), effective from Sunday through to September 20, “because of confusion amongst market participants regarding these instruments.”

The funds have been listed on the NASDAQ Nordic ever since 2015 but have more recently become available to investors in the US through the OTC market.

“The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company,” the SEC said in its notice issued on Sunday.

The SEC further cautioned that brokers and dealers that allow customers to trade either the Bitcoin Tracker one and Ether Tracker One or provide quotes throughout the halt’s duration may also be subject to enforcement actions.

“If any broker or dealer enters any quotation which is in violation of the rule, the [c]ommission will consider the need for prompt enforcement action,” the SEC wrote in its notice.

In an order issued on Sunday, SEC Secretary Brent J. Fields said that accurate and consistent information regarding the two funds has been a serious downfall, causing widespread confusion amongst broker-dealers.

“The [c]ommission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above quoted company,” the order reads.

Following the SEC’s announcement on Sunday, bitcoin and ethereum both tumbled, dipping 0.48 percent to US$6,324.25 and by 1.68 percent to US$195.27 respectively as of 6:37 p.m. EST on Monday (September 10), according to Coinmarketcap.com.

The overall market capitalization for digital currencies has also slumped in dramatic fashion since the start of the year: the market cap size of cryptocurrencies has dropped from US$615 billion on January 1 to just under US$195 billion on Monday.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.