ARK Invest, the investment management firm overseen by renowned investor Cathie Wood, recently made an amendment to its Spot Bitcoin ETF proposal, initially filed in April in partnership with crypto asset manager 21Shares, to include a surveillance-sharing agreement – something that was included in a similar filing by asset management titan BlackRock. This move has positioned ARK Invest and 21Shares in an advantageous position towards getting the green light from the SEC.
ETF Analyst Eric Balchuna from Bloomberg Intelligence jests that the inclusion of the surveillance agreement, the ‘silver bullet’, in their application is the key to getting SEC approval. Balchuna suggests ARK and 21Shares could be granted approval ahead of BlackRock owing to the earlier submission of their ETF proposal.
A key point of these applications is the “Spot BTC SSA” surveillance agreement with the Chicago Board Options (CBOE) BZX Exchange, an essential U.S. derivatives and securities market that provides fully collateralized Bitcoin and Ethereum futures. This agreement is purposed to prevent potential market manipulations and has emerged as a response to concerns addressed by the SEC.
The SEC has previously rejected many Bitcoin ETF proposals due to concerns about market manipulation and insufficient surveillance systems. A prime example is when the regulator rejected Bitwise’s spot Bitcoin ETF in June 2022, stating an exchange needed to provide a comprehensive surveillance-sharing agreement to ensure protection against fraud and manipulation.
Including such an agreement, therefore, seems like a strategic move by ARK Invest and 21Shares who have likely aimed at addressing the regulator’s concerns upfront. According to Ophelia Snyder, the president of 21Shares, these agreements could boost transparency and make crypto markets more aligned with the traditional markets in the United States. She went on to state that its considerations had been in the talks for years and could make regulators more at ease with the crypto industry.
Interestingly, BlackRock’s mid-June spot Bitcoin ETF application sparked excitement and a subsequent rally in the crypto market, causing Bitcoin’s price to surge over 21% and hit above $31,000. With ARK Invest and 21Shares now following suit, it may hint at a rising trend where investment firms adhere strictly to regulations to boost the broader mainstream acceptance of cryptocurrency.
Source: Cryptonews
