The U.S. Securities and Exchange Commission (SEC) has rejected yet another bid for a bitcoin exchange-traded fund (ETF) by Cathie Wood’s asset management firm ARK and crypto ETF provider 21Shares.
The ETF, which would have traded under the ticker symbol “BKT,” would have been physically backed by bitcoin and was designed to track the cryptocurrency’s spot price.
It was the second attempt by both companies to launch the ARK 21Shares Bitcoin ETF. The SEC had turned down the first filing on May 13 last year, citing a need for more regulation.
This time the SEC has reasoned the same thing, arguing that the Cboe BZX Exchange, which would list the ETF, has failed to demonstrate how it can protect the public from “fraudulent and manipulative acts and practices.”
“An exchange that lists bitcoin-based ETPs can meet its obligations under Exchange Act Section 6(b)(5) by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets,” stated the SEC.
On the other hand, the SEC has allowed the listing of various Bitcoin futures ETFs. The first futures Bitcoin ETF, launched by ProShares, recorded one of the most active opening days in NYSE history.
Unlike the Bitcoin spot market, the Bitcoin futures market is regulated by the Commodities Futures Trading Commission.
Despite the SEC’s cautious approach, interest in bitcoin ETFs remains high among investors. ETFs offer a convenient way for retail investors to gain exposure to bitcoin without having to worry about the technicalities of buying and storing the cryptocurrency.
Grayscale Investments, which also had its spot ETF application rejected, has decided to take legal action against the SEC.