The United States Securities and Exchange Commission (SEC) has postponed reviewing the Ark 21Shares Bitcoin exchange-traded fund (ETF) application.
This action is part of a broader trend, as the regulatory body is currently scrutinizing over a dozen applications for spot Bitcoin and other future ETFs, including submissions from financial giants such as BlackRock and Fidelity.
SEC Delays Bitcoin ETF Decision
Ark Investment Management and 21Shares initially approached the SEC for ETF approval in 2021. Their quest for sanction met a hurdle when the SEC turned down their second attempt earlier this year.
Traditionally, the SEC’s hesitation stems from concerns about potential market manipulation and a lack of robust consumer protection against illicit activities.
A successful ETF approval could revolutionize the crypto market. It would empower a larger portion of the general investing populace to trade Bitcoin. This would be achievable without the need to own the underlying asset directly.
Read more: BlackRock and Invesco Spot Bitcoin ETFs a Matter of ‘When, Not If,’ Expert Says
Cathie Wood, the CEO of Ark Invest, anticipated the delay. She revealed her expectation for the SEC to approve multiple ETF applications in one go.
“Because most of these essentially will be the same, it will come down to marketing, communicating, the message”, Wood expressed.
On the other hand, Scott Farnin, legal counsel at Better Markets, voiced strong reservations. Ahead of the SEC’s recent decision, Farnin declared that the surveillance-sharing agreements in the proposals were insufficient.
Farnin highlighted that Bitcoin is prone to manipulation, noting that it has inflated trading volumes, is concentrated, and depends heavily on select individuals and groups. He stressed these attributes make the proposed spot Bitcoin-based ETF exceptionally susceptible to misuse, leading to unnecessary risks for investors.
“The principal beneficiaries of the crypto craze are the criminals who use it to facilitate ransomware, money laundering, and illegal conduct of all types. It is within this context that the SEC must evaluate the latest wave of Bitcoin ETF filings this month,” Farnin said.
Farnin strongly advised the SEC to consider the inherent vulnerabilities of Bitcoin and remain consistent in their rejection of spot Bitcoin-based ETFs that fail to meet statutory requirements.
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
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