Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.
Bitcoin Investment Trust and SecondMarket, Inc. Settle Charges with SEC
Bitcoin Investment Trust (BIT) and SecondMarket, Inc. have settled charges that they violated Rules 101 and 102 of Regulation M of the Securities and Exchange Act of 1934 when they repurchased BIT shares during an ongoing distribution of the shares in 2014. Regulation M is intended to prevent manipulative conduct by prohibiting interested parties from bidding for or purchasing securities during a distribution period. SecondMarket and BIT have agreed to a cease-and-desist order against future violations of Rules 101 and 102 and SecondMarket has agreed to pay disgorgement of $51,650.11 in redemption, plus interest. In accepting the settlement offer, the SEC considered the parties’ reliance on legal counsel in connection with the redemption program. The cease-and-desist order is available here.
SEC Publishes Request for Comment on Bats BZX Exchange’s Proposed Rule Change in Connection with Winklevoss Bitcoin Trust
The SEC is soliciting comment in connection with a proposed rule change by Bats BZX Exchange, Inc. Bats filed the proposed rule change with the SEC on June 30, 2016 to list and trade Winklevoss Bitcoin Shares issued by the Winklevoss Bitcoin Trust under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares. The SEC will approve or disapprove the request within 45 days’ of its request for comment, issued on July 8. Bats states that the proposed rule change “will facilitate the listing and trading of an additional Commodity-Based Trust Share product that will enhance competition among market participants, to the benefit of investors and the marketplace.” The request for comment is available here.
For a comprehensive list of developments please see our Virtual Currencies: International Actions and Regulations.