Ark’s Revised Bitcoin ETF Approval Delayed – SEC Asks Public For Comment
The US Securities and Exchange Commission (SEC) delays ARK Invest’s BTC ETF approval, turning to public opinion.
The U.S. SEC filed to postpone its decision on whether to approve or deny the Ark 21Shares Bitcoin ETF for listing on BZX.
This would account as the first delay by the agency on the latest wave of Bitcoin spot ETF applications, which could mean that a similar short-term fate for rival applicants.
Public’s Opinion
In a letter issued on Friday 11 August, the SEC said it looking for public comment on BZX’s application, which would list the very first BTC spot ETF on an American regulated exchange.
“Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved,” said the agency.
SEC asked for the peoples opinion on whether the proposed ETF would be protected from “fraudulent and manipulative acts and practices,” and if the Bitcoin market is inherently susceptible to manipulation; something the SEC has been indicating as the reason for not approving a Bitcoin spot ETF until now.
Previously, ETF applicants have tried to form surveillance-sharing agreements with the CME Bitcoin Futures market to satisfy the SEC’s market monitoring needs. However, between ARK’s previous applications as well as those from Grayscale, the SEC has taken the view that this market is unable to convince otherwise.
SEC’s second question was aimed at lighting the matter if someone attempting to manipulate the Bitcoin market would necessarily have to trade on the CME.
“Do commenters agree with the Exchange that the CME, on which CME Bitcoin Futures trade, represents a regulated market of significant size related to spot bitcoin?”
The last question touched on Coinbase – America’s largest spot Bitcoin exchange, and ARK’s newly preferred surveillance sharing partner. Eight other applicants have named the same exchange in their most recent filings, following the footsteps of both Fidelity and BlackRock.
“Do commenters agree with the Exchange’s assertion that such an agreement with Coinbase would be “helpful in detecting, investigating, and deterring fraud and manipulation in the Commodity-Based Trust Shares”?”
BlackRock and Others?
After ARK, the next approval deadlines for rival Bitcoin spot ETFs are in early September, including BlackRock’s – but decisions on those applications can be similarly delayed.
ARK’s true final deadline at which the SEC can delay its decision no longer is on January 10. Given its virtually identical structure to competitors, ARK Invest CEO Cathie Wood expects that its approval will mean that of rival firms as well
Before we get that far, Grayscale expects to receive a ruling in its lawsuit with the SEC by the end of September. Bloomberg ETF analysts predict that this lawsuit would be the best bet to secure a spot ETF approval.
