key takeaways:
- The joint application for a Bitcoin ETF from Ark Investment and 21 Shares was rejected by the SEC.
- The government claims that the proposal did not adhere to the conditions set forth in the securities laws, again alleging fraud and deceptive actions.
A proposal to list a spot Bitcoin exchange-traded fund (ETF) for the US market was rejected by the Securities and Exchange Commission (SEC) of the United States.
The Cboe BZX Exchange had received a listing proposal for the Ark 21Shares spot Bitcoin ETF. The Cboe BZX Exchange was accused by the SEC of failing to “show that their plan is compliant with the rules’ pertaining to the avoidance of fraud and other nefarious activity.
The companies’ initial request to create a bitcoin ETF was turned down by the SEC in April. Together, 21Shares and ETF Securities Launch launched funds for the Australian market that same month. The funds were intended to assist investors in entering the world of virtual currency.
On behalf of the Cboe BZX Exchange, Ark 21Shares applied for approval to list its securities and amend the guidelines. The application was turned down by the regulator because it failed to develop investor protections.
Numerous petitions for an ETF investing directly in bitcoin have been rejected by the U.S. markets on a regular basis, but some funds that monitor the BTC futures market have been accepted.
The Commission uses the same analytical approach it used in its rulings evaluating earlier bids to list bitcoin to determine whether BZX’s proposal to list and trade the Shares is intended to stop fraudulent and manipulative activities and practices.
In order to determine whether a listing exchange of an exchange-traded product (“ETP”) can fulfil its requirements under Exchange Act Section, this is mostly based on commodity trusts and bitcoin-based trust issued receipts.
Together, 21Shares and ETF Securities Launch launched funds for the Australian market that same month. The funds were intended to assist investors in entering the world of virtual currency.
The SEC has not yet approved any application for a bitcoin ETF, citing uncertainty in the fundamental bitcoin market and worries about potential price manipulation for years.
The most regrettable tale concerning ETF application rejections comes from Grayscale, a division of the Digital Currency Group.
