SEC turns down ARK Invest, 21Shares application for spot Bitcoin ETF

The Securities and Exchange Commission has yet again put off listing a spot Bitcoin exchange-traded fund on US stock exchanges. This time, the financial regulator has rejected the spot Bitcoin ETF application jointly proposed by ARK Invest, an investment management firm, and 21Shares AG, a crypto ETP provider.

ARK 21Shares Bitcoin ETF was seeking to list on Chicago Board Options Exchange (Cboe) and offer investors exposure to Bitcoin, the world’s largest cryptocurrency by market cap, directly. Per the regulatory filing made in June 2021, 21Shares sought to act as the sponsor, crypto exchange Coinbase as the custodian, and ARK Invest to assist with the marketing of the ETF.

The decision on the application was postponed multiple times by the SEC since the companies first filed in June. The regulator last delayed its decision in January this year before finally rejecting the application on Friday.

Similar to previous rejections, the SEC denied the application from listing after it was unable to meet requirements 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.””

Rejecting multiple applications over the past year, the SEC is still disputing over spot Bitcoin ETFs. However, it has approved several ETFs tracking futures contracts of Bitcoin, including ETFs by ProShares, VanEck, and Valkyrie.

Regardless, SEC’s concerns over a spot Bitcoin ETF are likely causing frustration amongst applicants. In an interview with Bloomberg, Michael Sonnenshein, CEO of crypto management firm Grayscale, hinted that the company may seek legal action against the SEC if it continues to deny spot Bitcoin ETF proposals.

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