The Securities and Exchanges Committee(SEC) has rejected the application for Bitcoin ETF put forward by Ark Investment Management and 21Shares. The application was for an ARK 21Shares Bitcoin exchange-traded fund to be traded on Chicago Board Options Exchange or Cboe BZX Exchange.
Finally responding on March 31, the SEC says in its filing that its disapproval does not come from the evaluation of bitcoin or blockchain technology as an investment or innovation but from the inference that “BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5).”
The SEC also says the proposed rule changes are not “designed to prevent fraudulent and manipulative acts and practices” and do not “protect investors and the public interest.”
SEC chair Gary Gensler has been rejecting Bitcoin ETF applications for quite some time now.
The Cboe proposed a rule change to the SEC to be able to list and trade shares of the above-mentioned ETF. The proposed rule change was published for comment in the Federal Register on August 6, 2021, and designated for a longer period on September 15, 2021
The SEC has rejected VanEck Bitcoin ETF, WisdomTree’s Bitcoin ETF and Fidelity application for spot Bitcoin ETF as well. The chair has shown a clear preference for Bitcoin Futures instead of Bitcoin ETFs.
As of now, Grayscale Investment LLC has approached the SEC to transform its $30 billion Bitcoin trust into an exchange-traded fund (ETF) and threatened to sue the SEC if its application is rejected.
