Cboe amends filing for Ark's bitcoin ETF to include BlackRock-like feature

Companies • June 28, 2023, 11:51AM EDT

Quick Take

The Cboe BZX Exchange on Wednesday amended a 19b-4 filing for the proposed ARK 21Shares Bitcoin ETF to include a feature similar to one used for a spot bitcoin fund planned by BlackRock.
The revised filing includes a surveillance sharing agreement to deter fraud and market manipulation.

The Cboe BZX Exchange on Wednesday amended a 19b-4 filing for the proposed ARK 21Shares Bitcoin ETF to include a feature similar to one used for a spot bitcoin fund planned by BlackRock.

Specifically, the revised filing includes a surveillance sharing agreement to deter fraud and market manipulation.

“The Exchange is proposing to take additional steps to those described above to supplement its ability to obtain information that would be helpful in detecting, investigating, and deterring fraud and market manipulation in the Commodity-Based Trust Shares,” Cboe BZX said in the updated filing.

The exchange said it expects to enter into a surveillance-sharing agreement
with an operator of a U.S.-based spot trading platform for bitcoin.

"The Spot BTC SSA is expected to be a bilateral surveillance-sharing agreement between the Exchange and the US BTC Spot Market Platform that is intended to supplement the Exchange’s market surveillance program," it said. "The Spot BTC SSA is expected to have the hallmarks of a surveillance-sharing agreement between two members of the ISG, which would give the Exchange supplemental access to data regarding spot Bitcoin trades on the US BTC Spot Market Platform, if the Exchange determines it is necessary as part of its surveillance program for the Commodity-Based Trust Shares."

Amended filing for spot bitcoin ETF

The original 19b-4, filed in April, didn't mention the SSA. BlackRock's planned spot bitcoin ETF was different from previous attempts to gain approval from the U.S. Securities and Exchange Commission precisely because it featured the SSA with bitcoin spot market, CF Benchmarks CEO Sui Chung previously told The Block.

The amended filing could potentially put ARK in competition with BlackRock to gain the first approval of a spot bitcoin ETF, as the original filing for the fund came months ahead of BlackRock's. The SEC has never approved of one before, citing concerns of fraud and manipulation over the years.

Cboe filings earlier this month for spot funds from WisdomTree Bitcoin Trust, VanEck Bitcoin Trust and Invesco Galaxy Bitcoin ETF all make use of the SSA feature.

About Authors

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].