Investment management firm ARK Invest has refined its proposal for a spot Bitcoin ETF, responding to the U.S. Securities and Exchange Commission’s (SEC) criticisms.
According to Bloomberg ETF analyst Eric Balchunas, the updated proposal includes details on Coinbase’s custodial practices, stating that the ETF’s assets are stored in separate addresses on the Bitcoin blockchain. The assets are not mixed with corporate or customer assets.
This adjustment comes after the SEC previously criticized Bitcoin ETF proposals for inadequate surveillance-sharing arrangements. Some applications, to address the SEC’s concerns, incorporated agreements with Coinbase through amendments submitted in July.
The revised proposal also mentions that the fund’s valuation methods do not align with U.S. generally accepted accounting principles (GAAP).
Scott Johnsson, General Partner and General Counsel at Van Buren Capital, noted that the updated filing includes comments on illicit activity and its potential impact on the ETF’s value. The filing also touches on Bitcoin mining and its environmental impacts, asserting that these factors could affect Bitcoin’s price and the proposed fund’s value.
ARK Invest’s update seems like a response to an SEC process started weeks ago requesting more extensive comments on proposals from BlackRock (iShares), Valkyrie, Invesco Galaxy, and BitWise. So far, the SEC has not approved a spot Bitcoin ETF but has approved Bitcoin and Ethereum futures ETFs.