The U.S. Securities and Exchange Commission (SEC), Ark Investment Management, and 21Shares Bitcoin (BTC) rejected his joint venture to list an exchange-traded fund (ETF) for the second time.
SEC Argues Spot Bitcoin ETF Application Is Insufficient To Prevent Frauds
The SEC said that the Cboe BZX Exchange, where the ETF will be listed, “could not demonstrate that its proposal is consistent with requirements” regarding the prevention of fraud and other malicious practices.
An attempt by Cathie Wood’s Ark Investment Management and Swiss investment products provider 21Shares to list a spot Bitcoin ETF in the US was rejected in April. The two companies decided to try once again by making a new application in May.
The US markets regulator has rejected multiple applications for an ETF that invests directly in BTC, but has approved a number of funds that track the BTC futures market.
Grayscale Investments, one of the firms whose bid was rejected, has chosen to take legal action over the SEC’s decision, and oral discussions will begin on March 7.
Grayscale argued Friday that market regulators can easily spot potential scams.
“Any fraud or manipulation in the spot market will necessarily affect the price of BTC futures, thereby affecting the net asset value of an ETP holding spot bitcoin or bitcoin futures and the price investors pay for the shares of such an ETP,” Grayscale wrote in reply. it was said.
In Grayscale’s petition, the CME stated that either its surveillance can detect spot market fraud affecting both futures and spot ETPs, or that “surveillance cannot do this for either type of ETP.”
*Not investment advice.
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