There is a new development in the Bitcoin and Altcoin market. ARK Investments reiterated its application for the Bitcoin ETF with an update that addressed SEC concerns. Let’s look at the details.
Will Bitcoin ETF approval come?
There is a new move from the American asset management company ARK Investment Management LLC. Accordingly, he filed an amendment with the Securities and Exchange Commission (SEC). Thus, Bitcoin took an important step towards the approval of the spot exchange-traded fund (ETF). This revised prospectus aims to address the SEC’s concerns. On the other hand, it brings the potential approval of the Bitcoin spot ETF one step closer.
ARK Investment’s amendment to its Bitcoin spot ETF prospectus in response to questions from the SEC looks at a few key areas. One of the main concerns highlighted by the SEC is Net Asset Value (NAV) calculation. The SEC had argued that it did not comply with Generally Accepted Accounting Principles (GAAP). He had also expressed doubts about the NAV calculation. ARK Investment acknowledges this concern. It also states that the Trust’s Index-based valuation of Bitcoin does not comply with GAAP standards. The Trust’s financial statements value BTC at fair market value as required by GAAP. This disclosure is an important step towards meeting regulatory requirements.
Custody and asset separation
Another important issue clarified in the updated ETF proposal relates to the segregation of assets. ARK Investment’s amendment emphasized that the Trust’s assets held by the Custodian will not be commingled with client assets. Instead, these assets are stored in “segregated accounts on the Bitcoin blockchain,” often called “wallets.”
Recent revisions to the Bitcoin ETF offering are seen as promising indicators of progress. Of course, immediate confirmation is not imminent. However, it is a positive development that ETF issuers are having constructive discussions with the SEC. Senior ETF Analyst Eric Balchunas of Bloomberg emphasized that there could be some back-and-forth with the SEC regarding these small but important details. However, the ongoing dialogue between issuers and the SEC is noteworthy. Accordingly, it appears as a positive sign indicating potential approval in the future.
Promising signs of progress
The SEC has had previous delays in approving a Bitcoin spot ETF. Therefore, the crypto community remains optimistic. Recently, a court decision in favor of Grayscale against the SEC’s rejection of Grayscale’s ETF application attracted attention. All this increased confidence in the possibility of ETF approval. Following this court decision, companies like Grayscale called on regulators to speed up approval of ETF applications. This also shows that the crypto industry is hopeful that a Bitcoin spot ETF will be approved soon.
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