What is the difference between the supervision and sharing agreement and the information sharing agreement, as institutions compete to include them in ETF filings?

What distinguishes the supervision and sharing agreement from the information sharing agreement in ETF filings?

When the financial giant BlackRock applied to launch a spot Bitcoin ETF in the United States, the crypto community speculated that the world’s largest asset management company could have a higher chance of approval than those failed “pioneers.”

BlackRock’s move has spurred a series of followers, including financial companies such as ARK Invest ment, Valkyrie and Fidelity, which have submitted their own Bitcoin ETF applications and incorporated the Shared Supervision Agreement (SSA) into almost all filing documents.

SEC’s requirement for shared supervision to prevent market manipulation in the crypto market is not new. It first appeared in the Winklevoss brothers’ Bitcoin ETF application in 2017, but a “Coinbase and Nasdaq Information Sharing Terms Sheet” obtained by crypto media CoinDesk revealed more details.

Industry insiders believe that, theoretically, the Information-Sharing Agreement (SSA) is more likely to affect the decision of the US Securities and Exchange Commission (SEC), which allows regulatory agencies to access additional background information on transactions, undoubtedly giving the SEC more regulatory power.

The subtle difference between the SSA and the Information-Sharing Agreement can be described as the difference between “push” and “pull.”

The SSA focuses on data monitoring conducted by the spot exchange Coinbase. If it is deemed suspicious, it can be pushed to regulatory agencies, ETF providers, and listed exchanges.

In contrast, the Information-Sharing Agreement allows regulatory agencies and ETF providers to request data from the exchange.

The relevant information may be related to specific transactions or traders, and the agreement also forces cryptocurrency exchanges to share data, including personally identifiable information (PII), such as customers’ names and addresses. The Information-Sharing Agreement did not appear in any spot Bitcoin ETF documents, but this structure already exists in other markets.

An insider told Coindesk that an important warning is that information sharing requests must be very specific and no different from a subpoena.

The anonymous source said: “This is not just a fishing expedition, it includes all information attached to any exchange between two specific points in time. The obvious concern is that, almost by definition, cryptocurrency traders do not like to share information about themselves. Overall, this is antithetical to the spirit of cryptocurrency. But to make ETFs successful, [companies] must do so.”

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