Blackrock’s (BLK) iShares Bitcoin Trust application to the U.S. Securities and Exchange Commission (SEC) this week might stand a better chance than previous attempts by other fund managers thanks to the promise of a “surveillance-sharing agreement” between exchanges.

On page 36 of the Nasdaq (where the proposed ETF will be listed) 19b-4 filing, it’s stated that to mitigate against market manipulation, Nasdaq will be brought in to enter into a surveillance-sharing agreement with an operator of a spot trading platform for Bitcoin (BTC).

Surveillance-sharing agreements allow for the sharing of information about market trading activity, clearing activity, and customer identification, allowing for little possibility of market manipulation.

Nasdaq’s proposed surveillance-sharing agreement, dubbed the “Spot BTC SSA,” is what makes this application different, and not simply the company’s size as the largest asset manager in the world, said Graeme Moore, Head of Tokenization, Polymesh Association.

“The SEC is very concerned with market manipulation related to Bitcoin prices, and has cited this in almost, if not all, previous rejections,” Moore said in an emailed statement. “This is because the SEC’s view is that Coinbase and others are not regulated as exchanges and therefore cannot be trusted to ‘prevent fraudulent and manipulative acts and practices’.”

However, industry veteran Dave Weisberger, CEO & Co-Founder of CoinRoutes, countered that any such surveillance-sharing agreement is superfluous.

“Why should it be necessary?” Weisberger said in an interview with CoinDesk.” Because Kraken, Coinbase, ItBit, Lmax and Bitstamp — all of their data feeds are public,” he added. “The SEC could clearly get all this data or hire someone to feed it to them. You can know every trade in every order, and that will give the SEC the ability to say, ‘Hey, this looks like a manipulative trade. So who did it?'”

The SEC has previously highlighted the importance of a surveillance-sharing agreements. In a notice in January regarding Cboe Digital’s request to list and trade shares of the ARK 21Shares Bitcoin ETF, agency officials said that “an exchange that lists bitcoin-based ETPs can meet its obligations under Exchange Act Section by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets.”

Blackrock’s iShares filed paperwork with the SEC on Thursday afternoon for the formation of a spot bitcoin ETF. The move comes after several other ETF proposals, including those of Grayscale, VanEck, and WisdomTree have previously been rejected.

Correction (16:00 UTC, June 16, 2023): Noted that Nasdaq, not BlackRock, made the 19b-4 filing.

Edited by Stephen Alpher.