The U.S. Securities and Exchange Commission (SEC) announced that it has suspended trading in two investment products that track cryptocurrencies because there is confusion as to whether they are exchange-traded funds (ETFs).
The suspension in trading of Bitcoin Tracker One and Ether Tracker One, which both claim to track the price of cryptocurrencies, will be in place in the US until at least September 20. Both are listed on a Nasdaq exchange in Stockholm, and trade “over the counter” in transactions that occur off exchanges within the United States.
“It appears … that there is a lack of current, consistent and accurate information,” the SEC said in a notice, according to Reuters. “Application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as ‘exchange-traded funds.’”
The issuer of Bitcoin Tracker One and Ether Tracker One did not immediately respond to requests for comment, while Nasdaq declined to comment.
The SEC has gotten tougher when it comes to crypto in the past year. In March the agency announced there were “potentially unlawful” systems operating that allow the trading of cryptocurrencies, adding that several online trading platforms should be registered with the SEC itself.
In addition, the commission issued potentially dozens of requests for information and subpoenas from companies who have dipped, or are dipping, corporate toes in the initial coin offerings (ICO) pool.
And in June, the SEC’s leading authority on bitcoin, cryptocurrency and initial coin offerings (ICOs) ruled that some well-known cryptocurrencies like bitcoin and Ethereum are not securities. However, the coins offered during initial coin offerings very likely are entirely — or mostly — securities.
“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” William Hinman, head of the Division of Corporate Finance for the SEC, said at the time.