- The US Securities and Exchange Commission (SEC) announced its decision regarding the Ark 21Shares Bitcoin exchange-traded fund (ETF) application while continuing to review applications.
- Traditionally, the SEC has rejected spot Bitcoin ETF products citing potential market manipulation and inadequate consumer protections against harmful activities.
- Scott Farnin, legal advisor for consumer advocacy group Better Markets, stated before the SEC’s decision that the regulator should completely reject Bitcoin ETF applications.
SEC announces its decision on the spot Bitcoin ETF application by ARK Invest; the expectations of ARK Invest CEO have been met.
SEC Announces Critical Decision for Spot Bitcoin ETF!
The US Securities and Exchange Commission (SEC) extended the review of the Ark 21Shares Bitcoin exchange-traded fund (ETF) application while continuing to review applications from traditional finance giants such as BlackRock and Fidelity. Additionally, the SEC stated that it requested further comments on this ETF proposal.
SEC has decided to extend the review process of ARK Invest’s spot #Bitcoin ETF application.
— COINOTAG (@coinotag) August 11, 2023
Ark Investment Management and 21Shares, who have been seeking ETF approval since 2021, submitted their first potential Bitcoin ETF application earlier this year after being rejected by the SEC.
Traditionally, the SEC has rejected spot Bitcoin ETF products citing potential market manipulation and inadequate consumer protections against harmful activities. If an ETF is approved, it will provide general investment public with access to trade and hold Bitcoin’s value without holding the digital asset itself.
Cathie Wood, CEO of Ark Invest, stated on Monday that she expected a delay in the decision on the company’s application but said that the SEC would eventually approve several applications simultaneously. Wood said the following;
“Because most of these will be fundamentally the same, ultimately marketing, communication, and messaging will be important. We’re trying to explain to people that our research is deep and that we’ve been doing this since 2015.”
However, Scott Farnin, legal advisor for consumer advocacy group Better Markets, stated before the SEC’s decision that the regulator should completely reject Bitcoin ETF applications and said that the surveillance sharing agreements established in the applications were “completely inadequate.” Farnin said the following in his statement;
“Spot Bitcoin markets have a history of widespread manipulation and wash trading; they have high density; and they rely on a selected group of individuals and organizations to secure the Bitcoin network. These are characteristics of the Bitcoin network that make a proposed spot Bitcoin-based ETP highly susceptible to manipulation by malicious actors and this carries unnecessary risks for investors and the public interest. The proposed rule changes do not offer much to neutralize these threats.”
