The SEC Just Denied Ark 21Shares Bitcoin ETF for the Second Time – Here’s Why

cryptonews.com:

The US Securities and Exchange Commission (SEC) has yet again refused to give its regulatory blessing to Ark Investment Management and exchange-traded note (ETN) issuer 21Shares to list a spot bitcoin (BTC) exchange-traded fund (ETF).

According to the document published on January 26, the SEC discussed the Cboe BZX Exchange on which the ETF would be listed and stated that, 

"The Commission concludes that BZX has [failed to] demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), which requires, in relevant part, that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.”"

It went on to say that, when considering whether the proposal by the exchange to list and trade these shares is designed to prevent fraudulent and manipulative acts and practices, the SEC used the same analytical framework it had previously used when assessing if an exchange looking to list an exchange-traded product (ETP) can meet its obligations under Exchange Act Section 6(b)(5).  

An exchange that lists bitcoin-based ETPs can meet its obligations under this Act, said the Commission, by demonstrating that it has "a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets."

And while surveillance-sharing agreements are not the only way for a listing exchange of a commodity-trust ETP to meet its obligations, said the document,

"Where, as here, a listing exchange fails to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, the listing exchange must enter into a