ARK Invest Modifies Spot Bitcoin ETF Proposal Following SEC Feedback

ARK Invest Submits Revised Proposal for Spot Bitcoin ETF to Address SEC Queries

In a bid to address concerns raised by the U.S. Securities and Exchange Commission (SEC), ARK Invest has filed an updated proposal for a spot Bitcoin exchange-traded fund (ETF).

The amendment submitted on October 11th incorporates a range of modifications covering aspects such as accounting methods, risk valuation techniques, surveillance-sharing agreements, and Coinbase’s custodial practices. Notably, the proposal emphasizes that the fund’s assets are securely held in segregated addresses on the Bitcoin blockchain, assuring that ETF assets remain separate from corporate and customer assets.

This adjustment aims to align the ETF proposal with SEC standards and enhance its prospects for approval, taking into account the regulator’s previous criticisms of spot Bitcoin ETF applications.

The revised application also acknowledges deviations from U.S. generally accepted accounting principles in the fund’s valuation methods. In addition to these adjustments, the updated filing explores concerns related to illicit cryptocurrency usage, underscoring that any increase in unlawful transactions involving digital assets could negatively impact the ETF’s value. It also discusses the potential influence of Bitcoin mining activities, including their environmental consequences, government regulations, fluctuating energy prices, and mining operation closures on the ETF’s value.

These amendments are seen as a proactive response by ARK Invest to anticipated SEC concerns. While the SEC has yet to approve a spot Bitcoin ETF, it previously granted approval for Bitcoin futures ETFs in 2021 and more recently, Ethereum futures ETFs.