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US Securities and Exchange Commission (SEC) – flint. Whatever happens, bends its line and stifles innovation in the bud, as it was intended. Yesterday, for example, it rejected another application to launch an exchange-traded fund linked to the spot price of bitcoin (ETF). And not from anyone, but from 21Shares AG, which represents Cathie Wood, an asset management company called Ark Investment Management.
The filing was filed with the SEC on behalf of the Cboe BZX exchange.
“The Commission finds that BZX failed to comply with its obligations under the Exchange Act and the Commission Rules to demonstrate that its offering complies with the requirements of section 6(b)(5) of the Exchange Act and in particular the requirement that, that the rules of the national securities exchange be “designed to prevent fraudulent and manipulative actions and practices,” as well as to protect investors and the public interest,” the SEC said in the decision.
Ark Investment Management and Swiss investment firm 21Shares teamed up to launch the product last July. The application from Ark 21Shares was rejected several times, the last time this happened in January of this year. However, it’s not about Katie Wood’s company. The SEC has rejected all bitcoin ETF applications it has received over the years.
The regulator is broadcasting the position of SEC Chairman Gary Gensler, who made it clear in late September last year that he supported the launch of a narrow class of Bitcoin-pegged exchange-traded funds (ETFs) that would invest in futures contracts rather than the cryptocurrency itself. The approval of a spot bitcoin ETF will have to be forgotten for now, he said at the time.
Gensler favors bitcoin ETFs that invest in futures contracts traded on the Chicago Mercantile Exchange, registered under the Investment Company Act of 1940, as such instruments “provide strong investor protection.” And this, in general, says it all. I’m sorry Katy. The SEC will not approve a spot bitcoin ETF until the wind changes.
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