The SEC has once again rejected a proposal to list the ARK 21 Shares Bitcoin ETF on equities exchange Cboe BZX, according to Jan. 26 statement from the SEC, which rejected a similar proposal in April.
The proposed exchange-traded fund would have been managed jointly by Cathie Wood’s ARK Investment Management and 21Shares if it had been approved. The purpose of the proposed fund was to allow investors to gain exposure to Bitcoin’s price within the confines of the regulated stock market.
The Cboe BZX Exchange had originally asked to list the ETF in June 2021. After the first application was rejected in 2022, it reapplied and made new legal arguments in an attempt to get the fund approved.
In its second application back in May, the Cboe BZX Equities Exchange argued that it has a “comprehensive surveillance-sharing agreement with a regulated market of significant size” that can prevent manipulation of prices. The ARK 21Shares Bitcoin ETF should therefore be allowed to be listed, the exchange argued. According to the application, this surveillance sharing agreement is with the Chicago Mercantile Exchange, where Bitcoin futures contracts are traded.
The application also argued that most currency and commodity spot markets are unregulated, but this does not usually mean that an application will be rejected for that reason alone.
In its response, the SEC rejected these arguments. It stated that the surveillance sharing agreement between Cboe BZX Equities Exchange and the CME does not apply to spot Bitcoin, since only Bitcoin futures contracts are traded at CME.
