SEC Delays Decision On Ark & 21Shares Bitcoin ETF
The Securities and Exchange Commission (SEC) has created ripples in the cryptocurrency and financial sectors by deferring its decision on the Ark Invest & 21Shares Bitcoin exchange-traded fund (ETF) proposal. The SEC’s recent actions have held the industry’s attention, as they continue to evaluate the future of a Bitcoin ETF, soliciting public feedback in the process.
The U.S. SEC has called for public input on the Ark 21Shares bitcoin spot ETF application, delaying a final decision by nearly eight weeks.
The US SEC put forward four reasons for not passing, including whether the Bitcoin spot ETF will be easily manipulated; whether CME is…
— Wu Blockchain (@WuBlockchain) August 11, 2023
SEC’s Thorough Assessment
Contrary to the widespread anticipation of a clear-cut verdict, the SEC did not pronounce either approval or rejection. Instead, the regulatory body has initiated a formal “proceedings” phase to meticulously assess the Bitcoin ETF proposal put forward by Ark Invest and 21Shares. This marks another chapter in a series of proposals that the SEC has grappled with in recent months.
It’s important to note that this initiation of proceedings doesn’t provide a glimpse into the SEC’s standpoint. It merely underscores the agency’s commitment to a thorough review, as indicated in official documents. The SEC has also extended an invitation to the public to share their opinions, lengthening the decision-making process.
CEOs Cathie Wood of Ark Invest and Hany Rashwan of 21Shares jointly expressed their confidence in the viability of their proposal. They acknowledged the intricate nature of gaining approval for a spot Bitcoin product while reiterating their dedication to providing a safe, regulated, and efficient access route to Bitcoin for the U.S. market. Their commitment remains resolute regardless of evolving regulatory dynamics.
Evaluation Phases and Deadlines
SEC regulations outline a structured timeline of 240 days for the evaluation of Bitcoin ETFs, divided into periods of 45, 45, 90, and 60 days. During these intervals, the SEC may approve, reject, or seek additional time for consideration. The recent 90-day deferment follows a similar postponement in June, setting a new deadline of August 13. Insights from Bloomberg Intelligence analyst James Seyffart suggests that the SEC’s forthcoming decision or potential further postponement regarding the ARK 21Shares Bitcoin ETF is projected for November 11. The agency is expected to finalize its stance by January 10.
To everyone asking if it is common for the SEC to ask for comments in a delay.. the answer is yes https://t.co/XHZJ0yMOX3
— Eric Balchunas (@EricBalchunas) August 11, 2023
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The conversation surrounding spot Bitcoin ETFs intensified when BlackRock, a prominent asset management firm, submitted an application in June. This prompted several firms, previously faced with rejections, to reintroduce comparable proposals. Ark Invest and 21Shares had already presented their joint proposition in April, positioning themselves as frontrunners in this emerging trend. The SEC’s decision delay wasn’t unforeseen, with Bloomberg Intelligence analyst Eric Balchunas having predicted this outcome. Ark Invest’s Cathie Wood concurred with this perspective, implying that the SEC might potentially approve multiple Bitcoin ETFs simultaneously should they favour the proposals.
