SEC Denied Cathie Wood’s Ark Invest Bitcoin ETF Application

SEC denied Cathie Wood’s Ark Invest Bitcoin ETF application and 21 Shares’ to create the spot ETF due to concerns about lack of oversight so let’s read more in today’s latest Bitcoin news.

ARK Invest and 21 Shares became the recent applicants to see their Bitcoin spot ETF application get rejected by the US SEC. The application would have created the ARK21Shares Bitcoin ETF that can trade on the Chicago Board Options Exchange with 21Shares being the sponsor and Coinbase being the custodian. The Investor, Cathie Wood’s Ark Invest filed the form with the commission in 2021 and the two companies also filed to create the ARK 21 Shares Bitcoin Futures Strategy ETF with aLpha Architect so if approved, the product can start trading with the ARKA Ticker on the CBOE.

The ETF or exchange-traded fund is a type of investment product that is tied to currencies, commodities, stocks, or bonds. In the case of BTC spot ETF, the companies tried to register and have the value of shares tied to the price of BTC. It will allow investors to participate in crypto markets without having to buy and sell BTC themselves. With BTC futures ETFs, the share price is tied to the derivatives or speculative bets about what Bitcoin’s price will do. So far, the SEC approved a few futures ETFs including the ones of Valkyrie Bitcoin Strategy and ProShares Bitcoin Strategy ETFs.

While the SEC maintained that there’s not enough regulation to approve a bitcoin spot ETF, it felt comfortable letting futures ETFs trade since the market is regulated by the Commodities Futures Trading Commission. After rejecting the application, the SEC said firms hadn’t met other requirements to prevent fraudulent and manipulative acts and protect investors alogn with the public interest. The letter said that the exchange could meet the obligation by simply demonstrating that the exchange has a comprehensive surveillance agreement with the regulated market related to the underlying or reference BTC assets.

The companies joined a list of peers that had their BTC spot ETF applications rejected such as Fidelity, Global X, NYDIG, First Trust, Van Eck, WisdomTree, and Krypton. Grayscale’s CEO Michael Sonnenshein who owned the company will receive a decision on their spot BTC ETF in July and said that all options are on the table when asked about whether he will file a lawsuit against the SEC.