The Disciplinary Committee of the Stock Exchange NasdaqStockholm has imposed a fine of more than $120,000 to XBT Provider AB, a provider of publicly-traded Bitcoin exchange-traded note (ETN), due to alleged violations of exchange rules and financial regulations.
The committee announced in late July 2017 that the company violated provisions of its Internal Rule Book and certain provisions of the Financial Instruments Trading Act.
Some of XBT Provider’s violations are the failure to ensure that the risk function reports to the board and the failure to conduct an audit of the firm’s Internet and information technology (IT) security.
Brief background of XBT Provider’s ETN
In April 2015, Nasdaq Stockholm approved the company’s Bitcoin Tracker One ETN, which is considered as the first Bitcoin-based item to be listed on the Swedish exchange. The ETN’s trading format is similar to all the other listed instruments on the Nasdaq exchange. Investors who want to invest should register an account through their investment advisors, banks or online brokers.
In his statement at that time, XBT Provider chief executive officer (CEO), Alexander Marsh, said that the ETN is a secure and easy way to invest in Bitcoin.
“By enabling this easy and secure way to invest in Bitcoin we hope to have eliminated the boundaries that earlier prevented individuals and companies from being able to actively invest in what we believe to be the future of money.”
XBT Provider’s reaction to the fine
The company’s board of directors announced in a statement that it has accepted the decision by the exchange. It added that majority of the violations were made in 2015 and the first half of 2016 when the firm was still owned by the KNC Group.
“Since acquisition by the Global Advisors group an entirely new management team has been put in place, a major and comprehensive remediation project has been completed and the issuer’s assets under management has grown ten-fold. Additionally, no personnel from the period prior to Global Advisor’s acquisition remain engaged by the issuer.”