SEC Delays Decision on ARK 21Shares Spot Bitcoin ETF

The Securities and Exchange Commission (SEC) has delayed making a decision on ARK 21Shares spot Bitcoin exchange-traded fund (ETF) application, adopting the same playbook they used before rejecting Grayscale last month.

The SEC has extended the window for it to decide whether to approve the ARK 21Shares spot Bitcoin ETF application. The securities’ regulator pushed back the date for a decision by 45 days to August 30.

According to a filing, the SEC through Matthew DeLesDernier, its assistant secretary, stated that postponing its decision was appropriate to “earn sufficient time to consider” the proposals before it. 

The application for spot Bitcoin ETF was originally filed back in May. In June, it filed a proposed rule change to list and trade shares of the ETF under the Cboe BZX Exchange (BZX).

The proposed rule change was published for comments in the Federal Register, but the Commission notes that “it received no comments” on the subject of the rule change.

The SEC has the backing of the law

According to the statement by DeLesDernier, the SEC’s justification for extending its decision is enshrined in law. He relied on Section 19 (b) (2) of the Securities Exchange Act of 1934 while noting that BZX brought its proposal under section 19 (b) (1) of the same Act.

The legislation empowers the Commission to either “approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved.”

The SEC has up to 45 days or in special circumstances 90 days to extend the deadline for giving its verdict regarding rule changes. The Commission designated August 30 as the new date, and Bitcoin ETF enthusiasts watch with bated breath as the day approaches.

The SEC’s bad streak

The SEC has racked up a streak of extending its decisions on spot Bitcoin ETFs in the last few months. In Dec, the regulator simultaneously delayed its decisions on both Grayscale and Bitwise spot Bitcoin ETFs by 45 days.

These delays have led to the eventual rejections of the applications. VanEck and WisdomTree have seen their applications rejected by the SEC in the past, while Grayscale has suffered a similar fate.

Grayscale announced that it would be dragging the commission to court after its rejection of the firm’s application. Grayscale’s lawyers referred to the SEC’s decision as “arbitrary and capricious”, and have filed for a judicial review of the matter, with a full-blown legal battle looming ahead.