Subject: Rule 19b-4 and Bitcoin ETF
From: Stephen Knell

January 9, 2018

Dear Sir,

I am writing to inform you of the proposed rule changes submitted by the CBOE in relation to proposed Bitcoin ETF.

CBOE has requested certain exemptions on the basis that a bad actor would have to control the entire Bitcoin network in order to affect the price on Bitcoin.

This is not the case.  As CBOE futures use only the Gemini exchange as a reference rate, a bad actor has only to buy or sell sufficent quantities on that exhange to profit from futures contracts. 

Given that CBOE EFT's would be based on CBOE futures, this gives sufficiently resourced bad actors opportunity to manipulate. 

I suggest a reference rate to a number of exchanges will reduce the opportunity for manipulation. 


Stephen Knell