| Asset manager ARK Invest and cryptocurrency ETP provider 21Shares have filed a new joint application to launch an exchange-traded fund (ETF) based on the first cryptocurrency. It takes into account the latest SEC comments.
A decision or extension of the term for consideration of the application is expected on July 9.
The commission has not yet approved any application to launch a spot bitcoin ETF, including from ARK Invest and 21 Shares, which partners submitted on May 20, 2021.
As with other similar proposals, the SEC then cited non-compliance with requirements to curb fraudulent or manipulative practices and protect investors.
The regulator also pointed to the lack of a market of sufficient size for the underlying asset. However, this did not prevent the agency from allowing the launch of exchange-traded funds based on futures for the first cryptocurrency from VanEck, Valkyrie Investments and ProShares.
Grayscale Investments admitted that the Commission violated the law when approving bitcoin futures ETFs, and declared its readiness to sue the department in case of refusal to convert GBTC into ETFs.
ARK Invest and 21 Shares also dispute the SEC's latest argument. The Complainants believe that the futures product, although traded on the CME under a cooperative oversight agreement, is still price-determined by the unregulated bitcoin spot market.
“[…] both the Exchange [Cboe BZX, where the ETF is expected to be listed] and the Sponsor believe that […] the CME bitcoin futures market is a regulated market of significant size, as it relates to both the CME bitcoin futures market and to the bitcoin spot market. Therefore, this proposal must be approved, ”the message says.
Recall that in April, the SEC allowed the listing of futures bitcoin-ETF from Teucrium based on the Securities and Exchange Act of 1934.
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