Cathie Wood’s Ark Amends Bitcoin Spot ETF Application to Emulate BlackRock
In an effort to increase its chances of getting approval from the U.S. Securities and Exchange Commission (SEC), ARK Invest, led by Cathie Wood, has made amendments to its Bitcoin Spot ETF filing. The changes come after taking inspiration from the filing presented by investment giant BlackRock earlier this month.
The Crucial Change by ARK
The modified 19b-4 filing by ARK suggests that the Cboe BZX Exchange, where ARK’s 21 Shares ETF would be listed, will enter into a surveillance sharing agreement (SSA) with a United States-based spot trading platform for Bitcoin. Although ARK did not disclose the specific exchange partner, it claimed that it represents a substantial portion of US-based Bitcoin trading.
This proposed Spot BTC SSA, combined with the information available through the Intermarket Surveillance Group (ISG) related to CME Bitcoin Futures, would enhance the exchange’s ability to detect and deter manipulation of the ETF shares.
The lack of a sufficient surveillance-sharing agreement regarding Bitcoin spot trading was the reason behind the rejection of ARK’s previous ETF application in January. While ARK and other firms proposed an agreement with CME Bitcoin Futures, the SEC argued that this market isn’t closely connected enough to spot Bitcoin trading.
ARK defended its choice of using CME Bitcoin Futures by pointing out that other ETFs have been approved for commodities that use relevant CME futures markets as a regulated market of significant size. These approved ETFs include commodities like gold, silver, platinum, palladium, and copper, which also have unregulated spot markets.
BlackRock’s own 19b-4 filing included the same passage as ARK regarding its stock exchange, Nasdaq, entering into an SSA with a United States-based spot Bitcoin exchange. Bloomberg ETF analyst Eric Balchunas suggests that since ARK filed its application first, it has a higher chance of being approved before BlackRock.
This adds another twist to the plot bc SEC decision due on this in August, if they delay it is bad sign for approval unless, they delay and then approve BlackRock, which shows favoritism. Grayscale decision announcement also plays into timing of all this. GRAB THE POPCORN. – Eric Balchunas
Balchunas also speculates that BlackRock may have prevented Coinbase from participating in ARK’s SSA due to its existing partnership with Coinbase for its own product.
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