SEC Audits ARK 21Shares Bitcoin ETF, Proposal Opens For Comments

The US Securities and Exchange Commission has delayed a decision on whether to approve or reject a Bitcoin (BTC) exchange-traded fund (ETF) proposed by ARK Investment Management.

On August 11 notice, the Securities and Exchange Commission opened A 21-day comment period for the ARK 21Shares Bitcoin ETF to the public following publication in the Federal Register, the latest delay for the regulator to decide whether or not to approve the ETF in the US. ARK originally filed to list the ETF in May, giving the SEC a maximum of 240 days – until January 2024 – to reach a final decision.

To be listed on the Cboe BZX Exchange – the target of ARK Investment Management – the applicant must provide evidence of a “in force comprehensive control sharing agreement with a regulated market of significant volume”. The SEC previously rejected the company’s crypto ETF proposals, claiming that they would not be “designed to prevent fraudulent and manipulative business and practices” or protect investors.

“A regulated market of high volume does not require regulation of the bitcoin spot market in order for this proposal to be approved, and precedent shows that the underlying market for a regulated spot commodity or currency would in fact be a regulated market,” the SEC said on Aug. 11.

Cathy Wood, founder and CEO of ARK Investment Management, said in an Aug. 7 interview that she expects the SEC to delay its decision. However, I also expected the committee to simultaneously approve multiple BTC ETFs at some point in the future.

Related: ETF Analyst Raises Chances of Instant Approval of US Bitcoin ETF to 65%

ARK Investment Management is one of several companies in the US that have applied for a spot cryptocurrency ETF listed on a regulated exchange. BlackRock, the world’s largest asset manager, sent out a special request for it in July. A number of companies have also modified existing applications to include cryptocurrency exchange Coinbase as a watch-sharing partner after reports that SEC officials could be more open to accepting spot ETFs under the circumstances.

As of Aug. 11, the SEC has not approved any spot crypto ETF implementation for stock listings in the US, but has begun allowing investment vehicles linked to BTC futures in October 2021. Grayscale is currently engaged in a legal battle with the SEC over refusal Commission to allow his Bitcoin Fund to be listed as a Bitcoin Index ETF.

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