The U.S. Securities and Exchange Commission (SEC) has rejected a Bitcoin spot ETF from ARK and 21 Shares, as indicated in a Jan. 26 filing.
Cboe BZX intended to list the planned ETF. The exchange’s proposed rule change, which would have allowed the listing, was specifically rejected today.
The SEC said that Cboe BZX failed to demonstrate that it could comply with certain sections of the Securities Exchange Act. Though Cboe BZX’s proposal specifically addressed concerns around surveillance, the regulator said that the exchange did not show that it could prevent fraud and market manipulation or protect investors.
The regulator rejected Cboe BZX’s previous proposal in April 2022. The exchange submitted a follow-up proposal to the SEC just one month later in May 2022. The SEC postponed the deadline for its decision before it finally rejected the proposal today.
If Cboe BZX’s proposal had succeeded, the resulting ETF would have been managed by Ark Invest — an investment management firm headed by Wall Street veteran Cathie Wood — and 21 shares. It would have been listed on Cboe BZX’s own exchange.
The SEC has rejected many previous Bitcoin spot ETF proposals on virtually identical grounds. The regulator rejected applications WisdomTree and VanEck last October and November respectively. Fidelity, SkyBridge, and others have also been met with rejection.
The most notable and persistent ETF applicant is undoubtedly Grayscale, which is aggressively trying to persuade the SEC to allow it to convert its existing Bitcoin trust into an exchange-traded fund. The two parties are now in court over the matter.
To date, U.S. regulators have not approved any Bitcoin spot ETFs. The SEC has, however, approved various Bitcoin futures ETFs since October 2021.