The U.S. Securities and Exchange Commission (SEC) has announced the temporary suspension of two investment products that track cryptocurrencies - Bitcoin Tracker One (Ticker Symbol: CXBTF) and Ether Tracker One (Ticker Symbol: CETHF), because there is confusion amongst market participants whether these products are exchange-traded funds (ETFs).

These are Bitcoin and Ether tracking exchange-traded products (ETPs) offered on a regulated exchange and are issued by XBT Provider AB, a Swedish-based arm of the U.K. firm CoinShares Holdings. The suspension commences at 5:30 p.m. EDT on September 9, 2018, and terminates at 11:59 p.m. EDT on September 20, 2018. The SEC explains the reasoning:

"The broker-dealer application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as “Exchange Traded Funds.” Other public sources characterize the instruments as “Exchange Traded Notes.” By contrast, the issuer characterizes them in its offering materials as “non-equity linked certificates.”

The SEC further stated that it thinks the public interest and the protection of investors require a suspension of trading in these two securities. The CXBTF and CETHF provide exposure to the performance of the digital currencies bitcoin and ether by synthetically tracking performance of the price of bitcoin (BTC/USD) and ether (ETH/USD), less a fee. These two securities are traded in the same manner as any share or instrument listed on the Nasdaq exchange in Stockholm. These got listed on the exchange since 2015 and entered the U.S. market last month enabling domestic investors to access and invest in the crypto ETPs in an over-the-counter (OTC) market with their U.S. dollars. 

The Bitcoin and other cryptocurrencies ETFs have been facing the backlash from the SEC as it hasn't approved any till date, though the investment firms have been pushing for the same. The SEC in August 2018 disapproved a total of nine Bitcoin ETF proposals from three different entities - - ProShares, Direxion, and GraniteShares, claiming that the products did not comply with the requirements by the Exchange Act. Later, SEC said that it will review its decision. The Commission had also postponed its decision on the listing and trading of a VanEck-SolidX Bitcoin ETF until September 30. While in July, the Commission for the second time rejected the application for a Bitcoin ETF by twin brothers Tyler and Cameron Winklevoss, founders of crypto exchange Gemini. However, one SEC Commissioner named Hester M. Peirce officially dissented the SEC's decision.