SEC denies Cathie Woods bitcoin ETF for second time

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Approval of a regulated crypto derivative still seems much less likely, as US regulators have once again denied Cathie Woods’ request for a long-awaited bitcoin spot exchange-traded fund (ETF).

The app reportedly created ARK Investment Managements and 21 Shares Bitcoin ETF trading on the Chicago Board Options Exchange (CBOE) BZX Exchange.

The agency said the filing failed to meet the requirement that the rules of a national securities exchange should be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

Cathie Woods ARK Investment Management and 21Shares amended their request in May after the U.S. Securities and Exchange Commission rejected their first proposal for an ETF that would invest directly in bitcoin. As part of the changes, the Swiss-based investment product issuer said its product would use US Bank as a qualified custodian, hoping such an adjustment would win its bitcoin exchange-traded fund application the blessing of the SEC. .

A decision was expected no earlier than mid-July, 45 days after the fund applications were posted on the Federal Register, but the SEC has yet to approve a single BTC exchange-traded fund. The last approval or disapproval deadline for the ARK 21Shares Bitcoin ETF was January 24, 2023.

It is essential that an exchange listing an equity derivative enter into a surveillance sharing agreement with the markets trading the underlying assets for the listing exchange in order to have the ability to obtain the necessary information to detect, investigate and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules, the SEC ruling said.

There are a number of pending applications to get a bitcoin ETF listed, but so far none have been approved by the SEC. The agency only extended the deliberation window or opened the issue for public comment to avoid making a decision on a proposal, which means today’s rejection comes as no surprise.

Earlier, the regulator also pushed back the deadline to make a decision on Kryptoin Bitcoin ETF, Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, and Wisdomtree Bitcoin Trust. More recently, he rejected a request from First Trust Advisors and SkyBridge, citing concerns about fraudulent and manipulative acts and practices in the marketplaces where bitcoin is traded.

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