Cathie Wood’s Ark Investment Management and Swiss investment products provider 21Shares’ Bitcoin ETF application has been finalized. The US Securities and Exchange Commission (SEC) chose to repeat its previous decision.
21Shares’ Bitcoin ETF application has been finalized
For the second time, the US Securities and Exchange Commission (SEC) has rejected 21Shares’ efforts to list a Bitcoin ETF. The SEC said the Cboe BZX Exchange, on which the ETF will be listed, “failed to demonstrate that its proposal was consistent with requirements” surrounding fraud and other malicious practices prevention.
Management and 21Shares’ first attempt to list Bitcoin ETFs was rejected in April. The two firms decided to give it another try by submitting a new application in May. For the second time, the SEC has rejected an ETF application for products that directly invest in Bitcoin.
The U.S. Securities and Exchange Commission rejected 21Shares’ application for a Bitcoin ETF, but had previously approved a number of funds monitoring the BTC futures market. The regulator allowed NYSE Arca and Teucrium to issue a BTC futures exchange-traded fund in April last year. 21Shares’ application is rejected on the grounds that the exchange on which the ETF will be traded is unsafe. The SEC has argued that the exchange Cboe BZX, on which the ETF will be listed, harbors fraud and other malicious practices.
21Shares rejected for second time in ETF application
The first application for a spot Bitcoin ETF was rejected in April. Cathie Wood’s companies, ARK Investment Management and 21Shares, then made another attempt to gain approval. The SEC initially rejected the ARK 21Shares Bitcoin ETF application in April, citing a lack of investor protections. A new filing was filed by Cboe BZX Exchange on May 13.
The SEC has yet to approve any spot Bitcoin ETFs. While allowing funds that trade BTC futures, it either rejects or delays these requests. Valkyrie’s XBTO Bitcoin Futures Fund has so far been the only company whose ETF application has been approved.
Spot BTC ETF applications are made uniformly under the “Act 33” and are rejected without exception by the SEC as it is too risky for investors for a variety of reasons. The approval of two 33 Act BTC futures ETFs right now raises the industry’s hopes that a spot Bitcoin ETF approval is not far behind. But one of the SEC’s red lines is that the exchanges to be listed host malicious applications.
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