One notable adjustment pertained to the Net Asset Value (NAV) calculations, which ARK Invest acknowledged were not aligned with Generally Accepted Accounting Principles (GAAP), the accounting standard endorsed by the SEC.
Eric Balchunas, an ETF analyst at Bloomberg, recently took to the social media platform X to reveal that ARK Invest’s latest amendment to its spot Bitcoin Exchange Traded Fund (ETF) filing may signify a positive step toward future approvals for a Bitcoin ETF.
It’s worth noting that the Securities and Exchange Commission (SEC) had sent comments and questions to issuers a few weeks prior, seeking clarifications and adjustments to their S-1 documents.
In response, ARK Invest and 21Shares submitted an updated application for their spot Bitcoin ETF on Wednesday, which included additional information detailing the fund’s operational processes, such as asset custody and valuation methodologies.
Balchunas, shared his perspective on these developments, stating that the amendments to the filing “mean ARK got the SEC’s comments and has dealt with them all, and now put the ball back in the SEC’s court.” Balchunas went on to express his optimism, referring to these changes as “a good sign” and a clear indicator of “solid progress”.
Similarly, James Seyffart, another ETF analyst at Bloomberg, suggested that this clarification demonstrates open communication between ARK Invest, 21Shares, and the SEC, a positive indication for future approval. While ARK’s responsiveness is a positive development, it does not necessarily guarantee immediate approval. Balchunas noted that the SEC might engage in further back-and-forth discussions on specific details, and the regulatory process may take time.
It is, however, crucial to recognize that the SEC’s rigorous scrutiny is part of its mandate to ensure investor protection and market integrity.
Key Changes in ARK’s Updated Prospectus
One notable adjustment pertained to the Net Asset Value (NAV) calculations, which ARK Invest acknowledged were not aligned with Generally Accepted Accounting Principles (GAAP), the accounting standard endorsed by the SEC.
Another critical change in the updated prospectus involves the handling of assets. The document mentions that the Trust’s assets held with the Custodian are kept in segregated accounts on the Bitcoin blockchain, often referred to as “wallets”. These assets are explicitly mentioned as not commingled with corporate or other customer assets.
This separation is a clear response to concerns regarding the safekeeping of assets in the crypto space. It demonstrates ARK’s commitment to ensuring the security and transparency of its Bitcoin holdings.
Scott Johnsson, general partner at Van Buren Capital, also weighed in on the amended filing. He highlighted a new addition in the filing, which addressed concerns related to the potential negative impacts on the ETF’s value.
Specifically, it mentioned the risk of Bitcoin being used for illegal purposes and the environmental implications of Bitcoin mining. Johnsson opined that ARK’s amendments demonstrate a willingness to cooperate with the SEC rather than create unnecessary obstacles through a disclosure review.
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