SEC Rejects Ark 21Shares’ Bitcoin ETF Application

The U.S. Securities and Exchange Commission (SEC) rejected an application filed by  Cboe BZX Exchange asking to list a Bitcoin exchange-traded fund (EFT) by Ark 21Shares, citing a lack of investor protection. 

 “The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest,’” the SEC wrote in its decision.

 Eric Balchunas, Senior ETF analyst at Bloomberg weighed in on the discussion tweeting “JUST IN: ARK’s spot bitcoin ETF has been Genzinated. No surprise. Death toll up to about 10 now. No approval until SEC has control of the exchanges. Ht @CoinDesk.” 

The application was filed on July 20, 2021 and after several extensions, the SEC has come to a decision. SEC chair, Gary Gensler, has made it quite clear that he prefers Bitcoin ETFs that trade Bitcoin futures instead of one that holds Bitcoin directly. 

This isn’t the first time that the SEC has rejected Bitcoin ETFs. In March, the commission rejected NYDIG and Global X’s spot Bitcoin ETF proposal, along with applications from Fidelity, First Turst, Krypton and Van Eck. 

In addition, the SEC postponed decisions on applications for spot Bitcoin ETFs from One River Asset Management to April 3 and WisdomTree to May 15. 

Author: Tyler Irvin

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