ARK Invest Gains Edge In Spot Bitcoin ETF Race With Epic Surveillance Sharing Maneuver

Cathie Wood’s ARK Invest has made a strategic move that potentially gives it an edge in the race for a spot bitcoin exchange-traded fund in the U.S. The firm has amended its application to include a surveillance-sharing agreement, similar to BlackRock’s recent filing.

ARK Amends Spot ETF Filing To Include BlackRock-Like Feature

ARK Invest has updated its Bitcoin ETF application with the SEC.

The update includes a surveillance sharing agreement with the Cboe BZX Exchange — on which the ETF would be listed —  and a U.S.-based crypto exchange, most “likely Coinbase,” according to Bloomberg ETF analyst Eric Balchunas.

“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 revised application.

A surveillance-sharing agreement entails sharing data regarding market trading activity, clearing activity, and customer verification to guard against possible market manipulation.

ARK requested permission to list its native spot BTC ETF a third time in April after previous applications were rejected by the SEC back in 2021 and 2022. As a reason for the denials, the securities regulator indicated that it did not fully satisfy the rules of practice and Exchange Act provisions for listing a financial product.

The amended 19b-4 filing potentially puts ARK in competition with BlackRock to gain the first-ever approval of a spot bitcoin ETF in the United States, as the original filing for the fund came earlier than BlackRock’s. 

As per Balchunas, the SEC’s decision is expected in August, and any potential delays could be seen as a really bad sign for approval unless the delay is followed by green-lighting of BlackRock’s ETF, which could signal a hint of “favoritism.”

BlackRock already tapped Coinbase to be its Bitcoin custodian if and when it’s granted approval. As such, there are concerns about whether the investment giant would allow Coinbase to enter into a surveillance-sharing agreement with another entity that could potentially overtake it on the market.

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