Coinbase (COIN) Shares Soar 16% on News of ETF Surveillance-Sharing Agreement with Cboe

Coinbase Global Inc (NASDAQ: COIN), the popular cryptocurrency exchange, experienced a 16% surge in its shares following the announcement of a surveillance agreement with Cboe’s BZX Exchange.

Coinbase has agreed to participate in a surveillance-sharing agreement (SSA) for five Cboe spot Bitcoin exchange-traded funds (ETFs).

Coinbase shares reached a high of $92.15 but eventually closed at $89.15, reflecting a 9.78% increase within 24 hours.

Over the past three months, COIN has gained 27%, with remarkable growth of over 70% in the last month and an impressive 151% climb since January.

An amendment submitted to the Securities and Exchange Commission (SEC) revealed that Cboe BZX Exchange and Coinbase reached an agreement on June 21.

The amendment outlined the SSA, which allows the BZX Exchange to access Coinbase’s spot BTC trade data for market surveillance purposes related to Commodity-Based Trust Shares.

The agreement further grants the BZX Exchange the authority to request additional information from Coinbase for enhanced market surveillance and fraud prevention.

This measure aims to detect and investigate potential manipulation in the trading of Commodity-Based Trust Shares.

The SSA approach is gaining traction among companies seeking approval for spot Bitcoin ETFs. Asset management giant BlackRock recently applied for the iShares Bitcoin Trust ETF, with plans to provide indirect Bitcoin investment options for clients.

Notably, BlackRock’s filing also included an SSA with Coinbase, reinforcing its commitment to fraud prevention and market manipulation detection.

Likewise, the Cboe BZX Exchange amended a filing for the ARK 21Shares ETF, incorporating provisions for an SSA to prevent and investigate fraudulent activities and market manipulation.

In the past, the SEC has rejected all spot Bitcoin ETF applications due to insufficient fraud prevention and market manipulation measures.

However, there is growing speculation that the SEC might approve a proposal this year. Market sentiment suggests that BlackRock has a strong chance of receiving approval, as the company has addressed the SEC’s concerns effectively.