Cathie Wood amends Bitcoin ETF bid to get SEC’s blessing
Despite being rejected twice previously, Cathie Wood’s Ark Invest has made an amendment to its proposal for a spot Bitcoin exchange-traded fund (ETF) by including a Surveillance Sharing Agreement (SSA) with a Bitcoin spot trading operator.
This addition aims to enhance market surveillance and prevent fraudulent activities within the ETF, which was the reason cited by the SEC to reject all proposals to create a regulated Bitcoin derivative product.
The amendment to the 19b-4 filing was made by the Cboe BZX Exchange for its ARK 21Shares Bitcoin ETF proposal. By including the SSA, the ETF will have a mechanism in place to share surveillance information with a Bitcoin spot trading operator. This collaboration will enable real-time monitoring of trading activities to identify and deter market manipulation and other forms of fraudulent behavior.
“The Exchange is proposing to take additional steps to those described above to supplement its ability to obtain information that would be helpful in detecting, investigating, and deterring fraud and market manipulation in the Commodity-Based Trust Shares,” reads the filing.
The decision to incorporate this feature in the filing aligns with the approach taken by asset manager BlackRock in its proposal for a spot Bitcoin ETF. By implementing an SSA and emphasizing market surveillance, Cboe aims to address regulatory concerns and promote a more transparent environment for Bitcoin ETF trading, it says.
Cathie Wood — a longtime bitcoin bull — has been buying up proxies for the crypto industry in relevant brands such as Grayscale Bitcoin Trust and exchange operator Coinbase.
Earlier in May, Cboe Global Markets made a third attempt to list and trade shares of a long-awaited spot bitcoin exchange-traded fund (ETF). The exchange operator filed a proposal with the U.S. Securities and Exchange Commission, this time in collaboration with Cathie Wood’s Ark Invest and crypto investment firm 21.
If approved, the ARK 21Shares Bitcoin ETF would be the first spot bitcoin ETF to be listed and traded on a U.S. exchange. This is the third time that Cboe has submitted a proposal to the SEC for this ETF, after its previous two proposals were rejected, along with multiple other proposals from Grayscale, Fidelity, NYDIG, and many others.
Earlier in January, the SEC once again denied Cathie Wood’s application for a spot bitcoin exchange-traded fund (ETF). The application would have created the ARK Investment Management’s and 21 Shares’ Bitcoin ETF trade on the Chicago Board Options Exchange (CBOE) BZX Exchange.
The agency said the filing did not meet “the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.”
Cathie Wood’s ARK Investment Management and 21Shares amended its application back after the SEC rejected their first proposal for an ETF that would invest directly in bitcoin. As part of the changes, the Switzerland-based investment-products issuer said its product would use US Bank as a qualified custodian, hoping such a tweak will win its bitcoin exchange-traded fund application the SEC’s blessing.