According to a Jan. 26 filing, the Securities and Exchange Commission (SEC) has rejected ARK and 21 Shares' Bitcoin spot ETF.
Cboe BZX intends to list the proposed ETF. The proposed regulation modification by the exchange, which would have allowed the listing, was specifically rejected today.
According to the SEC, Cboe BZX failed to establish its ability to comply with certain parts of the Securities Exchange Act. Despite the fact that Cboe BZX's proposal clearly addressed surveillance concerns, the regulator stated that the exchange failed to demonstrate that it could prevent fraud and market manipulation or protect investors.
In April 2022, the regulator rejected Cboe BZX's earlier request. One month later, in May 2022, the exchange submitted a follow-up plan to the SEC. The SEC postponed its decision date before finally rejecting the proposal today.
If Cboe BZX's application had been approved, the resulting ETF would have been managed by Ark Invest, a Wall Street veteran led by Cathie Wood, and would have consisted of 21 shares. It would have been traded on the Cboe BZX exchange.
Many past Bitcoin spot ETF proposals have been rejected by the SEC on nearly identical grounds. Last October and November, the agency rejected applications from WisdomTree and VanEck, respectively. Fidelity, SkyBridge, and other companies have also been turned down.
Grayscale is likely the most renowned and persistent ETF applicant, vigorously attempting to persuade the SEC to allow it to convert its existing Bitcoin trust into an exchange-traded fund. The case is presently in court between the two parties.
To date, no Bitcoin spot ETFs have been approved by US regulators. However, the SEC has approved several Bitcoin futures ETFs since October 2021.
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