The Securities and Exchange Commission has instituted proceedings to determine whether to approve a proposed rule change to list and trade shares of the ARK 21Shares Bitcoin ETF and is seeking public comment on topics including potential fraud and manipulation risk, an SEC order dated Monday showed.
The sponsor of the proposed spot bitcoin ETF is 21Shares US, the order said. 21Shares is a Zurich-based provider of cryptocurrency exchange-traded products.
ARK Investment Management, founded by Cathie Wood, will assist in marketing the ETF’s shares. The ETF will seek to track the performance of bitcoin as measured by the performance of the S&P Bitcoin index, adjusted for the ETF’s expenses and other liabilities, according to the order, which also refers to the ETF as “the trust.”
The ETF’s assets will consist of bitcoin, held by its custodian, Coinbase Custody Trust Company, on the trust’s behalf, the order said. While the SEC has approved bitcoin futures ETFs, it has yet to approve a spot bitcoin ETF.
On May 13, the Cboe BZX Exchange filed with the SEC for the proposed rule change to list and trade the ETF’s shares. On July 12, the SEC designated a longer period within which to approve the proposed rule change, disapprove it “or institute proceedings to determine whether to disapprove the proposed rule change,” the order said.
“Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change,” the SEC’s order said. “Institution of proceedings does not indicate that the commission has reached any conclusions with respect to any of the issues involved.”
Rather, the SEC “seeks and encourages interested persons to provide comments on the proposed rule change,” the order said.
