Cathie Wood’s ARK Invest has amended its Bitcoin Spot ETF filing to include a new supervisory sharing agreement, drawing inspiration from the filing put forward by investment giant BlackRock earlier this month.
The change may give ARK a better chance of getting its product approved by the U.S. Securities and Exchange Commission (SEC), which has denied all flavors of the product so far.
ARK’s Crucial Change
According to modified ARK filing 19b-4the proposal suggests that the Cboe BZX Exchange – on which ETF Ark’s 21 Shares would be listed – will enter into a Supervisory Sharing Agreement (SSA) with “an operator of a US-based spot trading platform for Bitcoin” .
ARK did not name which specific spot exchange it would partner with, but claimed that it represents a “substantial portion of US-based Bitcoin commerce.”
“This BTC SSA Spot, in combination with information available through (Intermarket Surveillance Group) regarding CME Bitcoin Futures, which the Exchange believes represents a sizeable regulated market on its own, would further enhance the Exchange’s ability to detect and to deter manipulation of the shares,” Ark wrote.
The failure to secure a sufficient surveillance sharing agreement related to Bitcoin spot trading is behind the rejection of Ark’s latest ETF application in January.
While Ark and other companies – such as Grayscale – have offered to do this deal with CME Bitcoin Futures, the SEC says this market is not connected enough to spot Bitcoin trading.
Ark backed its defense for the use of CME Bitcoin Futures, arguing that other ETFs have been approved for commodities that use their relevant CME futures market as a “significantly sized regulated market.” Additionally, many of these commodity and currency-based ETFs had unregulated spot markets, including for gold, silver, platinum, palladium, and copper.
BlackRock Folder
BlackRock’s own filing 19-b4 included the same passage as Ark about his respective exchange, the Nasdaq, entering an SSA with a spot Bitcoin exchange in the United States.
According to Bloomberg ETF analyst Eric Balchunas, Ark’s filing puts the company in a position to be approved before Blackrock, since it filed first.
This adds another twist to the intrigue of the SEC ruling due on this in August, if they delay that’s a bad sign for approval unless they delay and then approve BlackRock which makes showing favoritism. The grayscale decision announcement also plays into the timing of it all. TAKE THE POPCORN.
— Eric Balchunas (@EricBalchunas) June 28, 2023
Balchunas added that BlackRock may have blocked Coinbase from participating in Ark’s SSA, since the investment giant is already a Coinbase partner for its own product.
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