Investment firm ARK Invest, led by Cathie Wood, has made a significant change to its spot Bitcoin exchange-traded fund (ETF) application that could increase its chances of being approved by the U.S. Securities and Exchange Commission (SEC).
ARK has added a custody sharing agreement between the CBOE BZX Exchange, which will list and trade the ETF, and a crypto exchange that will provide pricing data for the fund, according to a change made on June 28.
The crypto exchange was not named in the change, but some speculation is that it could be Coinbase, the largest US cryptocurrency platform.
The move aligns ARK's application with that of BlackRock, the world's largest asset manager, who recently filed for a spot Bitcoin ETF with the same oversight-sharing arrangement.
Both applications are based on rule 19b-4, which allows exchanges to list new products without SEC approval if they meet certain standards.
By adding this feature, ARK and BlackRock hope to address one of the main concerns the SEC has raised about BTC ETFs: the potential for market manipulation and fraud in the underlying crypto market. An oversight sharing agreement will allow the CBOE and crypto exchange to monitor trading activities and share information with each other and with regulators.
However, this does not guarantee that either application will be approved by the SEC, which has repeatedly delayed or rejected previous applications for BTC ETFs. The SEC has until August 13 to decide on ARK's application, and until November 14 for BlackRock's. The SEC can also extend these periods up to 240 days.
*Not investment advice.
