Ark Invest and 21Shares have amended their spot Bitcoin ETF application to conform to the Cash Creates proposal of the SEC.
ARK Invest and 21Shares have submitted to the United States Securities and Exchange Commission (SEC) an S-1 amendment for their spot Bitcoin ETF. Based on the filing, the firms have reached an agreement regarding the agency’s “cash create” redemption mechanism for the proposed product.
SEC Adamant on Cash Creates Model for Bitcoin ETF
James Seyffart, an analyst for Bloomberg ETFs, reported that on December 18, 2023, ARK 21Shares submitted an amended copy of its S-1 form. Based on the information presented in the document, ARK 21Shares has adopted the currency creation and redemption model the SEC advocates for all spot Bitcoin ETF applicants.
The SEC reportedly conferred with leading investment asset management firm BlackRock last month. Their discourse revolved around whether the forthcoming ETF offering would utilize a “in-kind” redemption model or a cash created model summary.
The SEC advised BlackRock and other prospective candidates of the spot BTC ETF to implement the cash create model when redeeming the ETF product.
Currently, BlackRock and Fidelity have emphasized the in-kind model as their preferred redemption mechanism. Conversely, ARK 21Shares appears to favor capital generation, as suggested by the SEC.
The utilization of currency creations as the redemption model, as disclosed in the most recent filing, may represent an additional tactic employed by ARK 21Shares to secure a “front row” position among those whose Bitcoin ETF applications are expected to be prioritized by the SEC.
Ark Invest on the Deadline For Approval
The SEC decision deadline for the ARK 21Shares Bitcoin ETF filing is rapidly approaching, and the asset management firm based in Florida is highly optimistic that it will receive a favorable response from the regulator. In particular, the deadline for the SEC to decide on the ARK 21Shares Bitcoin ETF is January 10, 2024.
Ahead of others, ARK 21Shares once argued that the submission hierarchy would evaluate its application. Concurrently, industry experts and ETF analysts have opined that the SEC might not be inclined to grant any applicants the first-mover advantage.
This information does not concern ARK 21Shares, as the company has already completed the third amendment to its Bitcoin ETF filing.
