ARK Invest has amended its SEC filing by including a surveillance-sharing agreement.
With the amended 19b-4 filing, ARK could be in direct competition with BlackRock to secure the first-ever approval for a spot Bitcoin ETF in the United States. 

ARK Invest, a prominent company competing for a Bitcoin exchange-traded fund (ETF), has amended its SEC filing by including a surveillance-sharing agreement. This modification comes after BlackRock filed for its own Bitcoin ETF, which already included such an agreement. ARK initially submitted its proposal to the SEC in April, approximately two months before BlackRock’s application. This recent revision may enhance ARK’s chances of being the first to gain approval for their ETF.

 The announcement of BlackRock’s intention to enter the market with a similar product prompted other issuers to rejoin the competition. However, in a recent filing by Cboe, the exchange planning to list the proposed ARK 21Shares Bitcoin ETF, it is mentioned that they anticipate entering into a surveillance-sharing agreement with a “United States-based spot trading platform for bitcoin.” 

With the amended 19b-4 filing, ARK could be in direct competition with BlackRock to secure the first-ever approval for a spot Bitcoin ETF in the United States. Since ARK’s original filing preceded BlackRock’s, approval timing becomes crucial.

According to the document, trading on the platform accounts for significant Bitcoin trading in the United States. 21Shares mentioned in a blog post that this addition to their proposal was made to enhance the strength of their application. It also indicates that the spot Bitcoin market is mature and compliant enough to warrant the approval of a related ETF.

The Impact of ARK Invest’s Surveillance Sharing Agreement on SEC Approval

JUST IN: ARK has amended their 19b-4 for spot bitcoin ETF to include a surveillance sharing agreement bt CBOE and a crypto exchange (likely Coinbase), which makes their’s like BlackRock’s filing now, and puts them in pole position to be approved first bc they filed first. pic.twitter.com/P8PCmPdhln

— Eric Balchunas (@EricBalchunas) June 28, 2023

According to Balchunas, the SEC is expected to make a decision in August, and any potential delays may be viewed unfavorably unless accompanied by the approval of BlackRock’s ETF, which could be perceived as a sign of favoritism.

Conversely, Ophelia Snyder, one of the co-founders of 21shares, has responded to Bloomberg’s ETF analyst Eric Balchunas’ tweet regarding ARK Invest’s recent surveillance sharing agreement with a cryptocurrency exchange. Snyder clarified that there is no incentive for a crypto exchange to enter into a surveillance sharing agreement (SSA) with only one party, such as ARK Invest. The purpose of these agreements is to enhance market transparency and interconnections, which would be undermined if only one party were involved.

While the new SSA between ARK Invest and a crypto exchange has the potential to address some of these concerns, it remains uncertain whether the agreement alone will sufficiently convince the SEC to approve ARK’s Bitcoin ETF application.

Furthermore, ARK may encounter challenges from competitors like BlackRock, which might not permit Coinbase to enter into a surveillance-sharing agreement that would benefit another issuer in beating them to the market. In such a scenario, ARK may need to seek out another crypto exchange to overcome these challenges.

While ARK’s implementation of enhanced surveillance measures may give them an advantage in the Bitcoin ETF race, the approval process remains uncertain.

 

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Filed under: Bitcoin - @ June 30, 2023 4:11 pm