The United States Securities and Exchange Commission (SEC) has rejected a proposal to list the ARK 21 Shares Bitcoin ETF on the Cboe BZX equities exchange.
The ETF, which would have been managed jointly by Cathie Wood’s ARK Investment Management and 21Shares, aimed to allow investors to gain exposure to Bitcoin’s price within the regulated stock market.
The Cboe BZX Exchange had originally applied to list the ETF in June 2021, but the application was rejected.
The exchange reapplied and made new legal arguments in May, arguing that it has a “comprehensive surveillance-sharing agreement with a regulated market of significant size” that can prevent manipulation of prices, specifically with the Chicago Mercantile Exchange (CME) where Bitcoin futures contracts are traded.
However, the SEC rejected these arguments, stating that the surveillance sharing agreement between Cboe BZX Equities Exchange and the CME does not apply to spot Bitcoin, and that the exchange has not demonstrated other means to prevent fraudulent and manipulative acts and practices.
The SEC has not yet approved any spot Bitcoin ETF to be listed on an exchange. Grayscale Investment Trust is currently seeking to convert its Bitcoin Trust into a spot Bitcoin ETF, and has sued the SEC for rejecting its proposal, with oral arguments scheduled for March.
