The U.S. Securities and Exchange Commission (SEC) has announced a significant delay in its decision regarding the proposed ARK 21Shares Bitcoin ETF. The decision has been postponed until January 10, 2024, marking yet another setback for cryptocurrency enthusiasts and investors eagerly awaiting the introduction of Bitcoin exchange-traded funds (ETFs) to the market. Additionally, the SEC has pushed back its decision on the Global X Bitcoin Trust to November 21, adding to the uncertainty surrounding the fate of these digital asset investment products.
The story behind this delay traces back to April 25, 2023, when the Cboe BZX Exchange, Inc. (BZX) submitted a proposal to the SEC for the listing and trading of shares of the ARK 21Shares Bitcoin ETF. This proposal was filed under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4. After being published for public comment on May 15, 2023, the SEC initiated proceedings to consider the proposal’s approval or disapproval.
This complex regulatory process witnessed multiple amendments to the proposed rule change. The Exchange filed Amendment No. 1 on June 28, 2023, followed by Amendment No. 2 on June 30, 2023, and Amendment No. 3 on July 11, 2023, each amending and replacing the previous versions. On August 11, 2023, the Commission published a notice of Amendment No. 3 and initiated proceedings to determine whether to approve or disapprove the proposal, as modified by this latest amendment.
Under Section 19(b)(2) of the Act, the Commission is mandated to issue an order approving or disapproving a proposed rule change no later than 180 days after the date of publication of the notice of filing. However, the Commission does have the authority to extend this period by up to 60 days if it deems it necessary and provides the reasons for such an extension. Given the complexities surrounding this proposal, the Commission has opted to extend the timeframe. The original 180-day deadline, which would have fallen on November 11, 2023, will now be extended to January 10, 2024. The extension will allow the SEC ample time to thoroughly assess the proposed rule change and the associated issues, particularly those brought forth in Amendment No. 3.
Notably, ARK CEO Cathie Wood had anticipated this delay, suggesting in August that the SEC might opt to approve multiple Bitcoin ETFs simultaneously. This approach, if taken, could potentially streamline the regulatory process for these investment products.
The SEC’s review of Bitcoin ETF applications extends beyond ARK’s proposal. The agency is currently evaluating applications from industry giants like BlackRock, Fidelity, VanEck, and Invesco, among others, who are seeking to introduce spot Bitcoin funds. ARK 21Shares Bitcoin ETF was initially ahead of the pack, but with the latest delay, other proposals may catch up.
Recent developments indicate that decision deadlines for BlackRock’s iShares Bitcoin Trust, Fidelity’s Wise Origin Bitcoin Trust, the VanEck Bitcoin Trust, the WisdomTree Bitcoin Trust, and the Invesco Galaxy Bitcoin ETF have all been pushed back until October 17. Additionally, the deadline for the Valkyrie Bitcoin Fund has been extended to October 19, while the Bitwise Bitcoin ETP Trust faces a decision deadline of October 16.
It’s important to note that the SEC has yet to approve a spot Bitcoin ETF due to concerns related to fraud and market manipulation. However, it did permit the first Bitcoin futures ETF to trade in 2021, marking a significant milestone in the institutional adoption of cryptocurrencies.
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