The United States Securities and Exchange Commission has delayed a decision on approving or disapproving the spot Bitcoin (BTC) exchange-traded fund (ETF) proposed by ARK Investment Management.
In an Aug. 11 notice, the SEC opened a 21-day comment period for the ARK 21Shares Bitcoin ETF to the public following publication in the Federal Register, the latest delay for the regulator determining whether to approve or disapprove of a spot crypto ETF in the United States. ARK originally filed to list the ETF in May, giving the SEC a maximum of 240 days — until January 2024 — to reach a final decision.
For a listing on the Cboe BZX Exchange — ARK Investment Management’s aim — an applicant must provide evidence of a “comprehensive surveillance-sharing agreement in place with a regulated market of significant size.” The SEC has previously rejected the firm’s crypto ETF proposals, claiming they would not be “designed to prevent fraudulent and manipulative acts and practices” or protect investors.
“The regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal, and precedent makes clear that an underlying market for a spot commodity or currency being a regulated market would actually be an exception to the norm,” the SEC said on Aug. 11.
Cathie Wood, founder and CEO of ARK Investment Management, said in an Aug. 7 interview that she expected the SEC to delay its decision. However, she also predicted the commission could simultaneously approve multiple spot BTC ETFs at some point in the future.
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ARK Investment Management is one of many firms in the U.S. applying to get a spot crypto ETF listed on a regulated exchange. BlackRock, the largest asset management firm in the world, notably sent in its own application in July. A number of firms also amended existing applications to include cryptocurrency exchange Coinbase as a surveillance-sharing partner following reports SEC officials could be more open to accepting a spot crypto ETF under those conditions.
As of Aug. 11, the SEC has not approved any spot crypto ETF application for listing shares in the U.S. but started allowing investment vehicles linked to BTC futures in October 2021. Grayscale is currently engaged in a legal battle with the SEC over the commission’s refusal to allow the listing of its Bitcoin trust as a spot Bitcoin ETF.
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