SEC Delays Decision on ARK's Spot Bitcoin ETF

• Financial

The US Securities and Exchange Commission (SEC) has once again postponed its judgment on the much-anticipated spot Bitcoin BTC exchange-traded fund (ETF) proposed by ARK Investment Management. This delay, as reported in an Aug.

11 notice, introduces a 21-day window for the public to voice their opinions on the ARK 21Shares Bitcoin ETF after its publication in the Federal Register. This development marks the most recent in a series of delays by the SEC in its deliberations concerning the approval of a spot crypto ETF on American soil.

Elusive Approval Amidst Regulatory Concerns

ARK Investment Management's ultimate goal is to list on the Cboe BZX Exchange. However, for this to materialize, an applicant must furnish evidence of having a “comprehensive surveillance-sharing agreement with a regulated market of substantial magnitude." Past proposals by the firm for a crypto ETF have been turned down by the SEC, primarily due to concerns surrounding the potential for "fraudulent and manipulative acts and practices" and the perceived lack of sufficient investor protection mechanisms.

Addressing this stipulation, the SEC, in its Aug. 11 statement, clarified, “The regulated market of significant size test does not necessitate the spot bitcoin market to be under regulation for the Commission's approval of this proposal.

Historical precedent underscores that having an underlying market for a spot commodity or currency be regulated is more the exception than the norm”. Cathie Wood, the dynamic founder and CEO of ARK Investment Management, had anticipated this delay.

In an interview dated Aug. 7, she expressed her belief that the SEC would push back its decision. However, Wood also speculated that the regulatory body might, in a groundbreaking move, grant approval to multiple spot BTC ETFs simultaneously in the foreseeable future.

Emerging Trends in Crypto Investments

As of the current date, no spot crypto ETF applications have been greenlit by the SEC for listing in the US. That said, there was a positive shift in October 2021 when the SEC began permitting investment structures associated with BTC futures.

Meanwhile, Grayscale, a renowned crypto investment firm, finds itself embroiled in a lawsuit against the SEC. This legal standoff revolves around the SEC's refusal to authorize the listing of Grayscale's Bitcoin trust as a spot Bitcoin ETF.