SEC Delays Decision on This ETF, Opens Public Comments

The United States Securities and Exchange Commission (SEC) has extended its decision-making timeline for the approval or disapproval of a spot Bitcoin exchange-traded fund (ETF) presented by ARK Investment Management. This delay is the latest in a series of postponements by the regulatory body, which is currently evaluating the feasibility of permitting a spot cryptocurrency ETF in the U.S. The SEC’s move comes after ARK Investment Management’s CEO, Cathie Wood, anticipated the decision delay earlier in August.

Public Comment Period Initiation

Chairman Gary Gensler (Source: Fortune)

On August 11, the SEC announced the initiation of a 21-day comment period concerning the ARK 21Shares Bitcoin ETF, as published in the Federal Register. This latest development further extends the process for determining whether to give the green light to a spot crypto ETF in the United States. ARK Investment Management first submitted the ETF proposal in May, affording the regulator a window of up to 240 days, until January 2024, to reach a final verdict.

Key Considerations in SEC’s Decision: Growing Interest in Spot Crypto ETFs

Addressing the matter, the SEC emphasized that the requirement for a regulated market of significant size does not mandate the spot Bitcoin market to be regulated as a precondition for approving the proposed ETF. They clarified that historical precedence suggests an exception to the norm would be created if the underlying market for a spot commodity or currency were regulated.

ARK Investment Management stands among various U.S. firms seeking approval for spot crypto ETFs to be listed on regulated exchanges. Notably, BlackRock, the world’s largest asset management firm, submitted its application in July, signaling the industry’s growing interest in this investment vehicle. Moreover, a number of firms have revised existing applications to include cryptocurrency exchange Coinbase as a partner for sharing surveillance data. This strategic move follows reports suggesting that SEC officials might show greater openness to endorsing ETFs under such conditions.

Conclusion

The SEC’s decision to extend the evaluation timeline for ARK Investment Management’s spot Bitcoin ETF proposal underscores the cautious approach the regulatory body is adopting in assessing the viability of introducing such investment instruments into the U.S. market. As the industry awaits the SEC’s final decision, the outcome will undoubtedly have a significant impact on the broader cryptocurrency landscape and its integration into traditional financial markets.