SEC Rejects Bitcoin Spot ETF Proposal of Ark Invest and 21Shares

• The SEC has approved the introduction of several Bitcoin futures ETFs in the past.
• Institutions would be able to bypass internal charter restrictions as per SEC.

A Bitcoin spot ETF has been denied approval by the SEC yet again. ARK Invest, led by Cathie Wood, and 21Shares, a provider of cryptocurrency exchange-traded funds (ETFs), tried again with their strategy to launch the Bitcoin ETF, but were unsuccessful. The original filing date was May 13 of last year, a month after Ark’s first listing application for the goods on BZX was denied.

Commonly abbreviated as “ETF,” an exchange-traded fund is a kind of mutual fund that provides investors with indirect exposure to an underlying asset. Gold, and to a lesser extent Crypto, may be difficult to acquire and store on an individual basis, therefore this might be a helpful way to invest in these assets.

The SEC stated in its rejection:

“An exchange that lists bitcoin-based ETPs can meet its obligations under Exchange Act Section 6(b)(5) by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets.” 

Bitcoin Futures ETF Approval

Moreover, by allowing Bitcoin purchases via ETFs, institutions would be able to bypass internal charter restrictions that prevent them from doing so at now. Investors in cryptocurrencies are now desperate for such a product to enter the U.S. market, but so far, it hasn’t materialized.

On the other hand, the SEC has approved the introduction of several Bitcoin futures ETFs, with trading commencing in October 2021. Furthermore, one of the busiest first trading days in NYSE history was for the ProShares Bitcoin Strategy ETF which was granted approval by SEC. Moreover, Grayscale bitcoin ETF had met a similar fate of rejection and has been trying hard over the years.