The Securities and Exchange Commission of the United States (SEC) has rejected a request for a physical Bitcoin exchange-traded fund for the second time (ETF). Ark 21Shares, which is run by investment legend Cathie Wood, filed this.
The SEC denied an ARK 21Shares Bitcoin ETF proposal last Thursday, citing a lack of investor protections, according to a filing.
Cathie Wood and 21Shares lead ARK Investment Management LLC. 21Shares is an exchange-traded product (ETP) issuer based in Europe. They formed a partnership and submitted an application for the ARK 21Shares Bitcoin ETF. This is a request on behalf of the Cboe BZX Exchange to alter the regulations and allow the Ark 21Shares offering to be listed.
The SEC’s rejection of the Chicago Board Options Exchange’s is because of the petition to list and trade the ARK 21Shares Bitcoin ETF. The proposed regulation change, it argued, would not be meant to prohibit deceptive and manipulative conduct and practices. It also fails to safeguard investors and the public good.
The SEC also stated that the Cboe BZX Exchange had failed to meet the SEC’s and the Exchange Act’s standards for listing a financial product.
Exchanges who want to list a Bitcoin ETF must have “a thorough surveillance-sharing agreement,” according to these rules. It should be with a regulated, large-scale market for the underlying or reference Bitcoin assets.
Leading Crypto Investments
Ark Investment Management and 21Shares presented an application for a physical Bitcoin ETF to be listed in June 2021. It will trade under the ticker ARKB on the Cboe BZX Exchange. The SEC extended the evaluation period for such applications to April 2022 in January 2022.
Wood is one of the most outspoken and long-serving Bitcoin supporters. She has been buying Bitcoin proxies from companies like Coinbase and Grayscale Bitcoin Trust. However, in June of last year, the venture capitalist announced plans to launch her own Bitcoin Exchange-Traded Fund to profit from investors. As a result, interest in cryptocurrencies has grown.
Wood’s flagship product, the ARK Innovation ETF, was the best-performing US stock fund last year. The ARK Innovation fund owns around $820 million in Coinbase cryptocurrency exchange shares. As a result, it became the fund’s tenth-largest holding on the exchange.
Her fund also owns 8.986 million shares in Grayscale’s Bitcoin Trust, in addition to Coinbase. Simultaneously, it owns shares in the Square payments company. As a result, it has a significant quantity of Bitcoin on its financial sheet.