The third amendment is another attempt for ARK Invest to ensure that the proposal for the ARK 21Shares spot Bitcoin ETF will pass the SEC’s screening.
ARK Investment Management has submitted another amendment to the US SEC for its ARK 21Shares spot Bitcoin ETF proposal. The application, created along with European crypto asset manager 21Shares, is one of several proposals gunning for SEC approval as soon as possible. ARK Investment Management was founded by Cathie Wood, a known Bitcoin bull.
ARK 21Shares Adjustments
The prospectus filed on Monday is ARK Invest and 21Shares’ third amendment since the first filing was submitted in April. The previous amendment in October included a few adjustments, including a clear separation of assets. It notes that the assets held with the custodian would be in separate accounts, not mixed with customer or corporate assets. ARK Invest did this to demonstrate its commitment to transparency and security. The previous amendment also adjusted calculations for Net Asset Value (NAV). ARK Invest said the previous ARK 21Shares details for NAV were unaligned with Generally Accepted Accounting Principles (GAAP). The GAAP method is the SEC’s endorsed accounting standard.
Before the October amendment, the SEC was previously close to a deadline on the ARK 21Shares spot Bitcoin ETF. However, the Commission decided to delay its decision, stating that it needs more time to decide. The Commission postponed for another 60 days until January 11.
According to Bloomberg senior ETF analyst Eric Balchunas, the third filing is a “semi-shocker”, but “in a good way”. Balchunas believes multiple updates reflect a direct intention to get proposals as fit for SEC approval as possible. The senior analyst points out that the new amendment has a few updates, including a fee, which some X (formerly Twitter) users noted is too high. Balchunas also points out other updates, including new risk disclosures.
Another Bloomberg analyst James Seyffart has noted that the amendment likely means things are “likely still moving with SEC conversations”.
Spot Bitcoin ETF Is Likely
The SEC has never approved a spot Bitcoin ETF. The Commission has rejected all applications since the first one submitted by the Winklevoss brothers Gemini Exchange back in 2013. According to the Commission, no application for a spot Bitcoin ETF has adequately addressed concerns of fraud and market manipulation. Now, all of the recent applications and amendments seem to take these concerns into consideration. Applicants have introduced the surveillance-sharing agreement (SSA), among other things. The agreement allows parties to share information to promote transparency and considerably reduce the risk of manipulation. In June, the Cboe BZX Exchange amended the ARK 21Shares proposal to include an SSA, after BlackRock had done the same.
According to an X post from Seyffart last week, the final deadline for the ARK 21Shares Bitcoin ETF is the 10th of January 2024. Giant asset manager BlackRock Inc (NYSE: BLK) is reportedly confident it would get approval by January.
The general market sentiment towards a spot Bitcoin ETF is very positive. Most observers and analysts believe that an SEC approval is now only a matter of time. According to analysts at JPMorgan Chase & Co (NYSE: JPM), any rejection from the SEC could result in lawsuits against the agency.
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