Key Points:
- SEC delays ARK Bitcoin ETF decision, requests public comments.
- ARK Investment Management’s proposal awaits SEC approval.
- Regulatory scrutiny focuses on surveillance-sharing agreement.
The eagerly anticipated verdict regarding the proposed Bitcoin exchange-traded fund (ETF) by ARK Investment Management has encountered another delay, as the United States Securities and Exchange Commission (SEC) opts for additional time to conduct a comprehensive regulatory assessment.
Initiated on August 11, the SEC has opened a 21-day interval to gather public feedback on the ARK 21Shares Bitcoin ETF, which had been formally published in the Federal Register. This latest extension highlights the intricate nature of the regulatory procedure governing the fate of a prospective spot cryptocurrency ETF within the United States. With the initial application filed in May, the evaluation of ARK’s ETF proposal can span up to 240 days, potentially postponing the final decision until January 2024.
A pivotal requirement for ARK Investment Management’s aspiration to secure a listing on the Cboe BZX Exchange entails the demonstration of a comprehensive surveillance-sharing agreement with a regulated market of significant magnitude. The SEC’s prior rejection of the company’s earlier crypto ETF proposals centered on concerns surrounding inadequate measures to counteract fraudulent and manipulative practices, alongside the absence of mechanisms to safeguard investor interests.
In an official communication released on August 11, the SEC offered clarity on its position, emphasizing that the necessity for a regulated market of considerable size doesn’t inherently necessitate the direct regulation of the spot bitcoin market for the proposal to gain approval. The SEC cited historical instances where a regulated market for the underlying spot commodity or currency was an exception rather than the norm.
Cathie Wood, the founder and CEO of ARK Investment Management, had preemptively hinted at the potential for an SEC decision delay during an interview on August 7. She further speculated that the commission might ultimately grant approval to multiple spot BTC ETFs simultaneously.
In the competitive landscape of securing regulatory endorsements for spot crypto ETFs on regulated U.S. exchanges, several firms, including ARK Investment Management, are actively participating. Noteworthy among them, BlackRock, the world’s largest asset management company, submitted its ETF application in July. Responding to conjecture that the SEC might view a spot crypto ETF more favorably with the involvement of Coinbase for surveillance-sharing, several firms have amended their applications to include Coinbase.
As of August 11, the SEC has not granted approval for any applications seeking the listing of spot cryptocurrency ETFs within the U.S. Nevertheless, since October 2021, the commission has granted authorization for investment instruments linked to BTC futures. Presently, a legal dispute ensues between Grayscale and the SEC due to the commission’s decision to reject the listing of Grayscale’s Bitcoin trust as a spot Bitcoin ETF.
