According to reports, the US SEC has postponed reaching a judgment on the ARK 21Shares spot BTC exchange-traded fund (ETF) proposal. The watchdog adopted the same strategy before it rejected Grayscale’s application last month.
The SEC Postpones Verdict On ARK 21Shares Spot BTC ETF Application
The SEC has delayed the deadline for its verdict on whether to approve the application of ARK 21Shares for spot BTC ETF. It postponed the deadline for a judgment by 45 days to August 30th.
Besides, the SEC indicated in a filing that delaying its judgment was necessary. According to DeLesDernier, the SEC’s assistant secretary, the SEC needs ample time to evaluate the proposals before making a decision.
In May, ARK 21Shares submitted a preliminary application for a spot BTC ETF. Also, it submitted a proposed rule change in June. This was to allow it to list the shares of the ETF for trading on the Cboe BZX Exchange (BZX).
However, the Commission reports that it got no comments on the proposed rule change. Meanwhile, the rule change was published for comments in the Federal Register.
Law Backs The SEC’s Decision
According to DeLesDernier’s, the SEC’s rationale for prolonging its judgment is supported by law. He cited Section 19(b)(2) of the Securities Exchange Act of 1934 while noting that BZX submitted its proposal under Section 19(b)(1) of the same Act.
As stated by the law, the Commission is given the choice of approving the suggested rule change. It can also choose to disapprove the proposed rule change or even institute procedures to determine whether it should be rejected.
Furthermore, the SEC may extend the timeframe for rendering a decision on rule amendments. It can extend either by 45 days or 90 days in exceptional situations.
Meanwhile, the agency set August 30th as the new deadline. Therefore, supporters of the spot BTC ETF are waiting patiently for that day to arrive.
The SEC Continues Its Delays On Spot BTC ETF
Recently, the SEC has developed a pattern of delaying decisions on spot Bitcoin ETFs. In December, the watchdog postponed its rulings on Bitwise and Grayscale’s spot BTC ETFs by 45 days.
However, after these delays, the applications were ultimately rejected. The SEC has previously rejected petitions from WisdomTree, VanEck, and Grayscale.
The agency kept citing the protection of investors as the reason for rejecting the applications. Following the Commission’s denial of Grayscale’s application, Grayscale declared it would sue the organization.
To avoid a full-blown legal dispute, Grayscale’s attorneys have asked for judicial scrutiny of the SEC’s decision. The attorneys referred to the watchdog’s decision as unjustified.