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Sunday, July 21, 2024

Cathie Wood’s Ark Amends Bitcoin Spot ETF Application To Copy BlackRock

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Cathie Wood’s ARK Invest has amended its Bitcoin Spot ETF filing to include a new surveillance sharing agreement, taking cues from the filing presented by investment giant BlackRock earlier this month.

The modification may give ARK a better chance of getting its product approved by the U.S. Securities and Exchange Commission (SEC), which has denied every flavor of the product thus far.

ARK’s Crucial Change

According to ARK’s modified 19b-4 filing, the proposal suggests that the Cboe BZX Exchange – on which the Ark’s 21 Shares ETF would be listed – will enter a surveillance sharing agreement (SSA) with “an operator of a United States-based spot trading platform for Bitcoin.”

ARK didn’t name which specific spot exchange it would partner with, but claimed it represented a “substantial portion of US-based Bitcoin trading.”

“ This Spot BTC SSA, in combination with the information available through [Intermarket Surveillance Group] related to CME Bitcoin Futures, which the Exchange believes on its own represents a regulated market of significant size, would further strengthen the Exchange’s ability to detect and deter manipulation of the Shares,” wrote Ark.


The inability to form a sufficient surveillance-sharing agreement related to Bitcoin spot trading is what caused Ark’s last ETF application to be rejected in January.

While Ark and other firms – such as Grayscale – have proposed entering this agreement with CME Bitcoin Futures, the SEC claims this market isn’t closely connected enough to spot Bitcoin trading.

Ark stood by its defense for using CME Bitcoin Futures, arguing that other ETFs have been approved for commodities that use their relevant CME futures market as a “regulated market of significant size.” Furthermore, many of these commodity and currency-based ETFs had unregulated spot markets, including for gold, silver, platinum, palladium, and copper.

BlackRock’s Filing

BlackRock’s own 19-b4 filing included the same passage as Ark about its respective stock exchange, 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 firm in a position to be approved before Blackrock, since it filed first.

Balchunas added that BlackRock may have prevented Coinbase from participating in Ark’s SSA, since the investment giant is already partnered with Coinbase for its own product.

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