ARK Bitcoin ETF Decision by SEC Faces Another Delay Amid Regulatory Scrutiny
The decision regarding approval or disapproval of the proposed Bitcoin exchange-traded fund (ETF) by ARK Investment Management has been postponed by the United States Securities and Exchange Commission (SEC).
On August 11, the SEC initiated 21 days for public comments on the ARK 21Shares Bitcoin ETF, published in the Federal Register. This marks the most recent delay in the regulatory process of determining whether to greenlight or reject a spot crypto ETF in the United States. Initially submitted in May, ARK’s ETF application provides the SEC with a window of up to 240 days, extending until January 2024, to arrive at a final verdict.
To be listed on the Cboe BZX Exchange as ARK Investment Management desires, an applicant must demonstrate a comprehensive surveillance-sharing agreement with a regulated market of significant size. The SEC had previously turned down the firm’s crypto ETF proposals, asserting that they lacked measures to thwart fraudulent and manipulative activities, while also failing to safeguard investors.
In its communication on August 11, the SEC clarified, “The requirement for a regulated market of significant size does not necessitate the spot bitcoin market to be under regulation for the Commission to greenlight this proposal. Precedent indicates that a regulated market for an underlying spot commodity or currency would indeed be an exception rather than the norm.”
ARK Investment Management’s founder and CEO, Cathie Wood, stated in an interview on August 7 that she anticipated the SEC’s decision delay. She also speculated that the commission might eventually approve several spot BTC ETFs simultaneously.
Numerous firms, including ARK Investment Management, are vying to secure regulatory approval for spot crypto ETFs on regulated exchanges in the U.S. Notably, BlackRock, the world’s largest asset management company, submitted its application in July. In response to reports suggesting that the SEC could be more amenable to a spot crypto ETF if partnered with Coinbase for surveillance-sharing, several firms amended their existing applications to include Coinbase.
As of August 11, the SEC has not sanctioned any spot cryptocurrency ETF applications for a share listing in the U.S. However, since October 2021, the commission has permitted investment instruments tied to BTC futures. Currently, Grayscale is embroiled in a legal dispute with the SEC due to the commission’s denial of listing its Bitcoin trust as a spot Bitcoin ETF.