Category Archives: Chris Concannon

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Cboe President Still Hopeful for First ETF Approval

The race to receive the coveted spot as the first Securities and Exchange Commission (SEC) approved Bitcoin exchange-traded fund (ETF) continues and Cboe Global Markets Inc believes it still has a chance to make it.

Speaking to Bloomberg, Cboe’s exchange operator’s president and chief operating officer Chris Concannon said that it was a matter of working through the issues that concern the SEC before an ETF can be approved. He believes Cboe can achieve this but recognizes the growth of a strong Bitcoin futures market may mean that a futures-based ETF may come first, rather than an exchange for the cryptocurrencies themselves.

What Concannon sees potentially problematic here, however, is that a futures-based ETF has never been done before, and it could be a struggle to find enough liquidity. Futures trading volumes have remained low compared with commodities contracts such as gold, although an ETF would certainly prompt a significant increase in trades. The SEC is hesitant to approve such an ETF until futures trading can provide sufficient liquidity, however.

Concannon said that he had learned there have been more articles than volume, describing the amount of media attention the market gets compared to its size as ”shocking”. He noted that the entire cryptocurrency market was only a fifth that of multinational technology company Apple.

Cboe was the first company to usher Bitcoin into mainstream finance during its bullish run in December last year, offering futures contracts for the cryptocurrency. Many interpreted this as a signal Wall Street was turning in favor of Bitcoin, with an ETF finally becoming foreseeable.

The SEC cited the potential for market manipulation in the nearly entirely unregulated market as the primary reason to deny approval, as was the case in the Winklevoss brothers rejection. The SEC said that they would require a surveillance sharing agreement with a large Bitcoin exchange to ensure no manipulation is taking place, of which the Winklevoss Bitcoin Trust could not provide at the time.

 

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CBOE President Says ICO “Reckoning” Due

The president of the Chicago Board Options Exchange (CBOE), Chris Concannon, says coming Securities and Exchange Commission (SEC) regulations for initial coin offerings (ICOs) will have catastrophic effects for investors and the market. He says “the reckoning will come in two waves” and “it should be keeping investors up at night”.

CBOE is the largest options exchange in the United States which facilitates the trading of over 1 billion contracts per year for 2,200 companies, 22 stock indices, and 140 exchange-traded funds. It was one of the first places to offer Bitcoin futures contract trading, so has expertise in the cryptocurrency world, while Chris Concannon is well known as a prominent cryptocurrency advocate on Wall Street.

Recent statements from the SEC indicate that most ICOs will be regulated as securities and must have proper clearance and licensing from the SEC in order to legally operate. Basically, any cryptocurrency that is created and sold for profit by an individual or organization, where investors expect a return on their investment, will be considered a security.

Concannon expects the SEC to take legal action against individuals and organizations conducting and investing in ICOs, and indeed this has already started with dozens of cryptocurrency firms subpoenaed this year. There will be severe consequences for anyone trading and propagating securities without a license. It is possible that the SEC could take retroactive legal action since security laws have been in place the entire time and, therefore, most of the ICOs in history have illegally raised funds by selling unregistered securities.

The result of this storm of lawsuits would be that ICOs considered unregistered securities could lose all of their value, which would cause investors to start suing each other and ICO teams for selling unregistered securities in an attempt to recover losses. A professor at Cornell University, Robert Hockett, said these lawsuits would have merit.

Between USD 5 billion and USD 7 billion has been raised by ICOs this year, and now the SEC will go through all these ICOs and decide which ones will be allowed to continue. This might be the beginning of the end for a lot of cryptocurrencies that were sold via ICO to United States citizens. As Concannon forecasts, there could be heavy legal consequences for many cryptocurrency investors, traders, and developers, as well as a significant negative impact on the overall diversity and market cap of the cryptocurrency market.

ICOs won’t be totally banned in the United States; perhaps some will successfully get SEC permission. This would require expenditure for fees and lawyers though, so ICOs will only be feasible for those with significant funding. Even worse, the SEC will be able to manipulate ICOs to change their platforms before granting permission, giving the government strong control over the evolution of blockchain platforms.

 

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