SEC denies ARK’s Bitcoin ETF again, 21Shares
Cboe BZX intended to list the planned ETF. The exchange’s proposed rule change, which would have allowed listing, was specifically rejected today.
The SEC said Cboe BZX has failed to demonstrate compliance with certain sections of the Securities Exchange Act. Although Cboe’s BZX proposal specifically addresses oversight concerns, the regulator said the exchange has not shown it can prevent fraud and market manipulation or protect investors.
The regulator rejected Cboe BZX’s previous proposal in April 2022. The exchange submitted a follow-up proposal to the SEC a month later in May 2022. The SEC extended its decision deadline before finally rejecting the proposal today. today.
Had Cboe BZX’s proposal been successful, the resulting ETF would have been managed by Ark Invest — an investment management firm run by Wall Street veteran Cathie Wood — and 21 stocks. It would have been listed on Cboe’s own exchange BZX.
The SEC has rejected numerous previous Bitcoin cash ETF proposals on virtually identical grounds. The regulator rejected the WisdomTree and VanEck applications last October and November respectively. Fidelity, SkyBridge and others were also rejected.
The most notable and persistent ETF contender is undoubtedly Grayscale, which is aggressively trying to persuade the SEC to allow it to convert its existing Bitcoin trust into an exchange-traded fund. Both parties are now in court on this matter.
To date, US regulators have not approved any Bitcoin spot ETFs. The SEC has, however, approved various Bitcoin futures ETFs since October 2021.