BlackRock chooses Coinbase for SSA despite the SEC's negative bias against the US-based exchange

• BlackRock has chosen Coinbase for surveillance sharing agreement in its Bitcoin ETF filing to put out SEC concerns about market manipulation.
• The move is concerning, considering the US-based exchange faces legal charges from the financial regulator over violating securities laws.
• Pro-Ripple attorney John Deaton has caught the controversy with rhetoric that institutional finance stands with the exchange.

BlackRock has chosen Coinbase exchange for its Surveillance Sharing Agreement (SSA) in its spot Bitcoin ETF filing. The inclusion was done by Nasdaq on behalf of the exchange in a move meant to put out concerns by the US Securities and Exchange Commission (SEC) about market manipulation. The news breaks as Bitcoin (BTC) price modestly breached the $31,000 mark, drawing closer to the desirable $35,000 target.  

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC makes modest leap above $31,000

BlackRock identifies Coinbase as the choice SSA

BlackRock, the manager boasting upwards of $9.1 trillion worth of assets within its purview, has featured the largest cryptocurrency exchange in the United States, Coinbase, as the SSA in its iShares Bitcoin Trust as indicated on Nasdaq's 19b-4 form. 

Citing a paragraph in the filing:

…it [the spot BTC SSA] is expected to be a bilateral surveillance-sharing agreement between Nasdaq and Coinbase…intended to supplement the regulator's market surveillance program.

For the layperson, a Surveillance Sharing Agreement, abbreviated as SSA, gives an organization, whether US-based or not, the authority to produce and share relevant data concerning market trading activity without being materially impeded or bound to secrecy or blocking laws outside the US jurisdiction. In the context of ETFs, specifically spot bitcoin trading, it defines agreements between crypto exchanges and market surveillance providers or regulators, in this case, the SEC.

Such agreements enhance the crypto market's integrity and transparency by sharing trading data and information.  If approved, BlackRock could share trade data, order book information, and other relevant market data with the SEC, thus alleviating the regulator's suspicion of market manipulation and giving it room to confirm the lack thereof.

The move is meant to support the previous filings by Fidelity, WisdomTree, Invesco, Ark Invest, and BlackRock, which the SEC had dismissed as inadequate, citing a lack of clarity and comprehensiveness.

BlackRock's SSA selection raises controversy

BlackRock's choice of an SSA has sparked controversy, sprouting from Coinbase being at the center of an ongoing legal tussle with the regulator. On June 6, the financial regulator sued Coinbase on allegations that the platform operates as an unregistered security exchange. This was barely 24 hours after the SEC filed a similar lawsuit against Binance, pointing to an organized clampdown extended against key players in the industry. 

With this background, the selection is controversial as market players ask themselves why the world's largest asset manager would include a court defendant in such an important application. Even pro-Ripple attorney John E. Deaton has noted the concern in a tweet, rhetorically attributing the choice to the SEC being outrightly biased against the industry.

Boasting the reputation of a heavyweight champion in SEC filings, BlackRock's Coinbase selection has raised eyebrows, but without concern of a negative impact on the filing. As the giant asset manager tries to win over the SEC with a nuanced arrangement to keep bad actors from manipulating the market, it is impossible to overlook its record of accomplishment thus far, which Bloomberg Intelligence puts at 575 wins against a single rejection.

FXStreet will keep you updated even as prospects of BlackRock improving its record against the financial regulator to 576 wins to one defeat continue to assuage the bear market woes. At the time of writing, Bitcoin price is $31,203 on CoinGecko, a daily rise of 2% and 15% up over the last month. 

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