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The provider of a publicly traded bitcoin exchange-traded note (ETN) has been fined over $120,000 by Nasdaq Stockholm for infractions of exchange rules and financial regulations.
The stock exchange’s Disciplinary Committee announced today that it had levied the fine because the company, XBT Provider, violated provisions in its Internal Rule Book and certain regulations of the Financial Instruments Trading Act.
As the result of its finding, the committee handed down a penalty of 1 million Swedish krona – an amount worth approximately $122,000 at press time.
Among those violations, according to the statement, were “failing to ensure that the risk function reports to the Board” and “failing to implement an audit of the Company’s internet and IT security.” The release also pointed to infractions related to annual reporting requirements.
The fine comes more than two years after regulators in Sweden first approved the ETN, which affords investors exposure to bitcoin without requiring them to actually purchase the cryptocurrency.
In a statement, XBT Provider’s board of directors said that it accepted the decision, highlighting that “the substantial majority of the infractions … occurred within 2015 and the first six months of 2016.” During that period, XBT Provider was owned by the company behind bitcoin mining firm KnCMiner.
“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,” the board said. “Additionally, no personnel from the period prior to Global Advisor’s acquisition remain engaged by the Issuer.”
The news comes soon after the ETN’s issuer revealed a major partnership in the UK.
Last month, XBT Provider announced that it was working with Hargreaves Lansdown, a decades-old asset manager, allowing their customers to purchase shares in the ETN.
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