Cathie Wood Suffers a Major Blow
2 min read
Cathie Wood took a hit on Friday when the U.S. Securities and Exchange Commission (SEC) turned down an application for a spot bitcoin exchange-traded fund EFT from the star investor’s Ark 21Shares.
Basically, the firm wanted the market watchdog to approve spot exchange-traded funds, or ETFs, based on actual bitcoin holdings.
‘Protect Investors and the Public Interest’
Cboe BZX Exchange filed an application to allow for a rule change, but the SEC said that BZX did not meet its burden under the Exchange Act and the Commission’s Rules of Practice, and “in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.’ “
The SEC said it had concluded that ” the record does not support a finding that the bitcoin market is inherently and uniquely resistant to fraud and manipulation.”
“Additionally, the continuous nature of bitcoin trading does not eliminate manipulation risk, and neither do linkages among markets, as BZX asserts,” the ruling said.
The SEC also said that “any concerns related to preventing fraud and manipulation related to spot bitcoin ETPs would ‘apply equally’ to the spot markets underlying the futures contracts held by a Bitcoin Futures ETF.”
ARK Invest and 21Shares U.S. LLC joined forces last year to launch Ark 21Shares. The application was delayed several times, most recently in January.
Wood has been a big bitcoin and cryptocurrency bull for a while.
‘Bro, SEC is Jaded and Sad’
In October, ARK Next Generation Internet ETF updated its prospectus to say that it may gain exposure to Bitcoin or other cryptocurrencies through “exchange-traded funds domiciled in Canada.”
Canada approved its first bitcoin spot ETFs, a year ago.
Reaction on social media to the SEC’s decision was mostly hostile.
“The earlier they realize this is a wrong decision, the better,” one person tweeted.
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2022-04-01 14:03:00
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