- After Grayscale, the SEC has rejected the spot Bitcoin ETF application from Ark 21Shares.
- The regulator has cited an issue in investor protections.
The crypto market is highly volatile and subject to high risk. Therefore, The U.S. Securities and Exchange Commission keeps an eye on the market for illicit activities. That is why the SEC is hesitant to approve spot Bitcoin ETF applications. Recently, it has rejected the application from Ark 21Shares for the same.
The Case of Bitcoin ETF
On March 29, a fume got started between the SEC and Grayscale, the world’s largest digital currency asset manager, regarding the approval of spot Bitcoin ETF applications. The SEC has repeatedly raised its concerns regarding the safety and security of these applications.
The Ark 21Shares application was filed to get permission to list its offerings and change rules and was made on behalf of the Cboe BZX Exchange. The regulator rejected the application as it lacked investor protections.
The SEC has stated in its decision, “The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest:'”
Further Reading: Grayscale considers legal action if Bitcoin ETF rejected.