ARK Invest and 21Shares file with SEC for spot ether ETF

Quick Take

  • Ark Invest and 21shares have applied with the Securities and Exchange Commission for a spot ether ETF, according to a filing dated Sept. 6.
  • The filing is the latest in a recent wave of applications from asset managers seeking approval for spot crypto funds. 

Cathie Wood's Ark Invest and 21shares have applied with the Securities and Exchange Commission for a spot ether ETF, according to a filing dated Sept. 6. The move comes amid a flurry of excitement as the crypto industry battles it out with the regulator for the first spot crypto fund. 

Dubbed the the ARK 21Shares Ethereum ETH -0.18% ETF, the fund would provide direct exposure to ether and trade on the Cboe BZX Exchange using the CME CF Ether-Dollar Reference Rate – New York Variant.

Ether pared losses on the news. It's currently down 0.1% over the past day at $1,632, according to CoinGecko. The world's second largest cryptocurrency by market capitalization has declined 10% over the past month. 

According to the filing, 21Shares is the sponsor of the trust, Delaware Trust Company is the trustee, and Coinbase Custody Trust Company is the custodian. ARK Investment Management is the sub-adviser of the trust and will provide assistance in the marketing of the Shares.

In a separate filing 19b-4 filing submitted by Cboe on Wednesday, the exchange said that the Bank of New York Mellon will be the administrator of the fund and transfer agent. Similar to recent filings for proposed bitcoin funds, the document references a surveillance-sharing agreement with Coinbase that was reached on June 21.

"The Exchange and Coinbase will finalize and execute a definitive agreement that the parties expect to be executed prior to allowing trading of the Commodity-Based Trust Shares," Cboe said in the filing.

Shares of Coinbase gained on Wednesday, rising 0.7% to $78.04, according to TradingView.  

Ether investing

"The Trust will not invest in derivatives," the asset managers said in the initial filing with the SEC. "The Sponsor believes that the Shares are designed to provide investors with a cost-effective and convenient way to invest in ether without purchasing, holding and trading ether directly."

The proposed ETF will still need formal approval from the SEC, which has yet to greenlight a spot crypto fund. Last month, it delayed decisions on a wave of other filings for similar spot bitcoin funds. 

Ark Invest Chief Futurist Brett Winton said earlier this week that the U.S. would be better served to embrace crypto rather than trying to suppress it. 


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"The U.S. attempts to wound bitcoin come at the expense of U.S. long-term strategic interests," he wrote Tuesday on the social network formerly known as Twitter.

Grayscale case

Ark and 21Shares were an early mover when it came to filing for a spot bitcoin ETF, which the SEC moved to delay a decision on last month. The pair last month also applied for a fund that would invest in bitcoin and ether futures. 

While the SEC has approved funds that invest in bitcoin futures, the approval process for the first spot crypto fund has been the center of a heated legal battle that saw Grayscale Investments take a win in late August. It told the regulator yesterday that it's waiting to hear about the next step.

Cboe referenced the case in the 19b-4 filing for the Ark fund on Wednesday.

"The court resolved this conflict by finding that the SEC had failed to provide a coherent explanation as to why it had approved the Bitcoin BTC +1.76% Futures ETPs while disapproving the proposal to list and trade shares of the Grayscale Bitcoin Trust and vacating the disapproval order," it wrote.

"Both the Exchange and the Sponsor believe that this proposal and the included analysis are sufficient to establish that the CME Ether Futures market represents a regulated market of significant size as it relates both to the CME Ether Futures market and to the spot ether market and that this proposal should be approved," it continued.

Cboe on Wednesday also filed a 19b-4 form for the proposed VanEck Ethereum ETF that lists Delaware Trust Company as the trustee and the State Street Bank and Trust Company as the administrator. It also mentions a surveillance sharing agreement with Coinbase.

(Updates with additional details throughout; includes 19b-4 filing from Cboe.)

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Nathan Crooks is the U.S managing editor at The Block, based in Miami. He was previously at Bloomberg News for 12 years, where he helmed coverage of South Florida after roles as a breaking news editor and bureau chief in Caracas, Venezuela. He's interviewed presidents, government ministers and CEOs, and, besides crypto, has covered major news events on the ground from earthquakes to hurricanes to the Chilean mine rescue in 2018. Nathan, a native of Clarion, Pennsylvania, holds a bachelor's degree from the University of Toronto, where he completed a specialist in political science, and an MBA from American University in Washington, D.C.


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