SEC Consults on Proposed Rule Change for Spot ARK 21Shares Bitcoin ETF

Only Bitcoin futures ETFs are currently listed in the US

The Securities and Exchange Commission (SEC) is seeking market comment on whether to greenlight the ARK spot 21Shares Bitcoin ETF.

According to a SEC Order on August 29, the US regulator is considering a rule change to allow bitcoin spot ETFs to list and trade.

As part of the comments, the SEC wants to understand whether spot Bitcoin ETFs could pose risks of potential fraud and market manipulation.

Last year, the regulator approved the first bitcoin futures ETF, however, spot bitcoin ETFs cannot currently be launched.

21Shares is one of several ETF issuers seeking SEC approval for spot bitcoin ETFs after first filing the ARK 21Shares Bitcoin ETF in June 2021.

ARK Investment Management will help market the ETF, with Coinbase Custody Trust Company acting as custodian of the strategy.

The ARK 21Shares Bitcoin ETF will seek to track the performance of bitcoin as measured by the S&P Bitcoin Index.

The proceedings began on May 13 when the Cboe BZX exchange filed with the SEC a proposal to change the rules for listing and trading the ARK 21Shares Bitcoin ETF.

A month later, the proposed rule change was published in the Federal Register on June 1. At the time, the commission received no comment on the proposed rule change.

On July 12, the SEC designated a longer deadline to approve the proposed rule change, refute it, or “initiate proceedings to determine whether to disapprove the proposed rule change,” the order says.

The CBOE BZY Exchange strongly stands by its assertion that bitcoin is resistant to price manipulation and that there are other ways to prevent acts of fraud or manipulation to justify rejecting the requirement to enter into a sharing agreement oversight with a significantly sized regulated market tied to spot bitcoin, the SEC order said.

As of this writing, ARK Investment Management and 21Shares have not responded to a request for comment.

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