Coinbase’s shares experienced a significant uptick of 16% on Tuesday before closing 9.87% higher, following the announcement of a key surveillance-sharing agreement with Cboe’s BZX Exchange, marking a pivotal development in the management of its spot bitcoin ETF applications.
On Tuesday, July 11, a notable surge was recorded in Coinbase‘s shares (COIN), which rocketed as much as 16% to reach a peak of $92.15. This surge in the company’s stock price is primarily attributed to a landmark agreement that the cryptocurrency exchange managed to secure with Cboe’s BZX Exchange. Notably, the contract focuses on surveillance-sharing related to five spot bitcoin exchange-traded fund (ETF) applications.
The stock was worth $89.15 — 9.87% higher — at the close of the markets today.
The agreement’s completion was noted on June 21, as per revisions to the initial filings presented to the U.S. SEC. In the early documents submitted, the exchange hinted at its intention to solidify a surveillance-sharing contract with Coinbase, a significant development for the digital currency industry.
According to the finalized contract in June this year, Coinbase consented to the surveillance-sharing agreement, referred to as “Spot BTC SSA.” In addition to the agreement, a term sheet was executed to outline the terms and conditions of the deal, signaling a significant shift in the cryptocurrency exchange landscape.
Furthermore, the submitted modifications pertain to all five ETF applications by Cboe. Among those set to benefit from this agreement are prominent entities like Wise Origin, WisdomTree, VanEck, Invesco Galaxy, and ARK 21Shares. Each of these applications stands to gain from the bolstered oversight and reduced risk of manipulation that the surveillance-sharing pact brings.
Indeed, the import of surveillance-sharing agreements, often called SSAs, has skyrocketed lately, becoming an essential component of all fresh ETF applications. This emphasis stems from the SEC’s steadfast view that such collaborations are instrumental in deterring potential market manipulation and ensuring fair trading practices.
Additionally, Nasdaq, the securities exchange responsible for facilitating BlackRock‘s bitcoin ETF application, has also secured a similar pact with Coinbase. This arrangement, referenced in a filing dated June 29, highlights the growing trend of surveillance-sharing contracts within the cryptocurrency industry.
These developments underscore the industry’s evolution and increasingly stringent regulatory landscape, shaping the future of digital currency exchanges and their trading practices.