SEC has Rejected the Bitcoin ETF Application from ARK 21Shares

The Securities and Exchange Commission of the United States has recently confirmed the rejection of the Bitcoin ETF application by Ark Invest. Ark Invest has shown visible support for cryptocurrency-related products for a long time. Last year, Ark Invest filed for a Bitcoin ETF product approval by ARK 21Shares. The application was first submitted to SEC in June 2021.

The Thursday filing of SEC also revealed a legislative change proposal rejection by the Cboe exchange. It is worth noting that Ark Invest was planning to list 21Shares on Chicago Board Options Exchange or Cboe BZX. The SEC also commented that the change of rule will not incorporate the prevention of fraudulent transactions or discarding market manipulation practices.

SEC Receives Backlash from Crypto Community for Rejecting Bitcoin ETFs

SEC has received a considerable amount of backlash from the cryptocurrency community and Bitcoin proponents. Many traders exemplify Canada, where the financial regulators gave a green signal for three Bitcoin ETFs last year. However, under the reign of new SEC Chief Gary Gensler, the commission has only allowed non-spot Bitcoin ETFs to get listed.

The remainder of Bitcoin ETF applications has been unable to see the light of the day and 21Shares is the latest applicant to join the list of casualties. SEC maintains that the Cboe BZX exchange did not meet the requirements set by the regulator. One of the clauses requires CBoe exchange to agree to a comprehensive surveillance charter.

Ark Investment Bitcoin ETF product that was planning to get a ticker ARKB on Cboe Exchange was also a spot product. It is worth mentioning that the spot Bitcoin ETFs allows the traders to gain direct exposure from the price of the top coin. 21Shares is a European cryptocurrency exchange market that corroborated with Ark Invest to issue the ARKB Bitcoin ETF after SEC approval.

On one end, the government regulators have refrained from approving spot crypto ETFs and on the other hand, the state has allowed futures contracts trading for Bitcoin traders. The spot Bitcoin ETF applicants like VanEck, Valkyrie, and ProShares have all faced the same verdict from SEC as Ark Invest last year. Some investors complain that futures ETFs are not generating as good a profit return as spot ETF products.