SEC Rejects ARK 21Shares Bitcoin ETF Listing

According to a statement released by the United States Securities and Exchange Commission (SEC) on January 26, the SEC has once again denied a request to list the ARK 21 Shares Bitcoin ETF on the stock exchange Cboe BZX. 

If approved, Cathie Wood’s ARK Investment Management and 21Shares would have shared management of the proposed exchange-traded fund. The proposed fund’s goal was to give investors access to the price of bitcoin in a regulated stock market.

Notably, in June 2021, European ETP issuer ARK 21Shares submitted a listing request to Ark Investment Management for a spot Bitcoin ETF that will trade under the symbol ARKB on the Cboe BZX Exchange. 

SEC has 180 Days to Request for Public Comment

The SEC has 180 days to decide or issue a request for public comment on the offering. In January 2022, the regulatory body’s review time was extended to April 2022. The idea was then reported to have been rejected by the SEC. 

According to the SEC, the Cboe BZX Exchange did not comply with the Exchange Act and its standards of practice’s requirements for registering a financial instrument.

Cboe claimed in its second application submitted back in May that it has a “comprehensive surveillance-sharing relationship with a regulated market of significant size” that can guard against price manipulation. The exchange argues that the listing of the ARK 21Shares Bitcoin ETF should be approved. 

This surveillance sharing arrangement, according to the application, involves the Chicago Mercantile Exchange (CME), where Bitcoin futures contracts are exchanged. The SEC dismissed these claims in its answer. 

It noted that the Cboe BZX Equities Exchange and CME Surveillance Sharing Agreement does not apply to spot Bitcoin because only Bitcoin futures contracts are traded at CME.

Applications for a Bitcoin exchange-traded fund have consistently been denied by the SEC. The cryptocurrency asset management giant Grayscale requested American investors react to the Securities and Exchange Commission (SEC) of the United States in February of last year due to reported delays for its Bitcoin spot exchange-traded fund (ETF).

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