The application for the Ark 21 Shares BTC exchange-traded fund (ETF) has been delayed by the SEC, of the United States. The regulatory body is presently reviewing over a dozen proposals for current BTC and other prospective ETFs, including submissions from financial titans like BlackRock and Fidelity. This action is part of a larger trend.
A SEC Delay Decision on Bitcoin ETF
In 2021, Ark Capital Management and 21 Shares first requested approval of an ETF from the SEC. When the SEC rejected their second application for censure early this year, their search for punishment hit a roadblock. The SEC has historically been hesitant due to worries about possible manipulation of markets and a lack of effective consumer protection against illegal activity. The crypto market might undergo a revolution if an ETF application is approved. It would enable more people to trade Bitcoin in the broader investing population. This could be done without personally owning the underlying asset. CEO of Ark Ventures Cathie Wood was aware of the delay. She expressed her desire for the SEC to quickly approve several ETF applications.
However, Scott Farnin, the Better Markets’ legal counsel, expressed grave doubts. Farnin argued that the proposals’ surveillance-sharing agreements were insufficient prior to the SEC’s recent judgment. As a result of its inflated trading volumes, concentration, and reliance on a small number of people and organizations, Farnin emphasized that Bitcoin is vulnerable to manipulation. He emphasized that because of these characteristics, the suggestion for a spot Bitcoin-based ETF is particularly vulnerable to abuse, putting investors at undue risk.
Criminals that use cryptocurrencies to promote ransomware, laundering of cash, and unlawful activity of all kinds are the primary beneficiaries of the cryptocurrency mania. The SEC must assess the most recent wave of Bitcoins ETF registrations this month in light of this, according to Farnin. Farnin urged the SEC to take into account Bitcoin’s inherent weaknesses and to continue rejecting identifying Bitcoin-based ETFs that do not adhere to legal criteria.