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Ark 21Shares and VanEck Spot Ether ETFs Seek Approval on Cboe's BZX Exchange

Sep 7, 2023 at 12:04 pm

Cboe's BZX Exchange has embarked on the process of introducing the very first spot ether exchange-traded funds (ETFs) in the United States, with a focus on products associated with Ark 21Shares and VanEck. The exchange officially submitted 19b-4 documents on Wednesday, initiating the regulatory review. Once the U.S. Securities and Exchange Commission (SEC) acknowledges the filings, a 240-day countdown will begin before a final decision is rendered. The SEC typically utilizes this entire timeframe for its comprehensive review process, including various intermediate deadlines.

Coinbase is set to play a pivotal role as the surveillance-sharing partner for both products, a role it currently holds in numerous spot bitcoin ETF applications currently under the scrutiny of the SEC. Furthermore, Coinbase will assume the role of custodian for the ether assets held within the Ark 21Shares trust. On the other hand, VanEck has not disclosed the identity of its custodian.

The potential approval of one or both of these applications would signify a noteworthy milestone for the U.S. market. Currently, there are no available spot crypto ETFs, although established financial entities like BlackRock and Fidelity have recently launched efforts to secure regulatory approval for spot bitcoin ETFs. Simultaneously, several asset managers have submitted applications to introduce ether futures ETFs.

Historically, the SEC has consistently turned down applications for spot bitcoin ETFs. However, the regulatory body encountered a setback when an appeals court deemed its rejection of an application by crypto trust overseer Grayscale as "arbitrary and capricious," particularly in light of the existence of bitcoin futures ETFs. The unanimous ruling emphasized the substantial correlation between the assets underpinning a bitcoin futures ETF and those that would support a spot bitcoin ETF. It's noteworthy that Grayscale operates as a subsidiary of Digital Currency Group, the parent company of CoinDesk.

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