ARK Invest, the asset manager, and the cryptocurrency ETP provider 21Shares filed a new joint application to launch a Bitcoin-based exchange-traded fund (ETF). It takes into account the latest comments SEC.
A decision or an extension of the review period is expected by July 9.
The Commission has not yet approved a single application to launch a spot Bitcoin ETF, including from ARK Invest and 21Shares, which partners filed on May 20, 2021.
As with other similar proposals, the SEC then cited non-compliance with requirements to curb fraudulent or manipulative practices and to protect investors.
The regulator also noted the absence of a market of sufficient size for the underlying asset. Nevertheless, this did not prevent the agency from approving futures-based Bitcoin ETFs from VanEck, Valkyrie Investments and ProShares.
Grayscale Investments conceded that the GBTC requires the Commission to obey the law when approving the futures Bitcoin ETF, and said it was prepared to sue the agency if the conversion of GBTC into an ETF is denied.
ARK Invest and 21Shares also challenge the SEC’s latest argument. The applicants argue that a futures product, although traded on CME with a joint regulatory oversight [regulators], is still defined by prices on the unregulated spot Bitcoin market.
“[…] and the Exchange [Cboe BZX, where the ETF is expected to list], and the Sponsor believe that […] the Bitcoin futures market on CME constitutes a regulated market of significant size, because it relates to both the CME Bitcoin futures market and the spot Bitcoin market. Therefore, this proposal should be approved,” the statement said.
In April, the SEC approved the listing of Teucrium’s futures Bitcoin ETF under the Securities and Exchange Act of 1934.
Previously, the head of the Commission Gary Gensler said that for possible approval of such instruments their underlying assets must be CME Bitcoin futures. He also mentioned filing the application under the Investment Company Act of 1940.
Earlier, Bloomberg analyst Eric Balchunas suggested that the SEC’s agreement with changing the clearing model would remove barriers to a spot Bitcoin ETF.
Subscribe to ForkLog news on Telegram: ForkLog Feed — all the news, ForkLog — the most important news, infographics and opinions