Cathie Wood’s Ark Invest has taken another stride in its pursuit of a Bitcoin spot exchange-traded fund (ETF) with the submission of a second amended application on October 11. This latest version introduces additional risk warnings, focusing on potential vulnerabilities within the Bitcoin network that could impact the ETF’s price.
Among the newly highlighted risks are concerns over electricity consumption, community-driven upgrades to Bitcoin’s source code, and the competitive landscape within the industry. The application also specifies that Coinbase, the chosen custodian, will safeguard the ETF’s underlying assets in segregated addresses on the Bitcoin blockchain, ensuring they remain distinct from corporate or other customer assets.
This move comes in light of the ongoing trial of Sam Bankman-Fried, co-founder of the collapsed FTX exchange, who is facing charges related to the commingling of user funds. Ark Invest, in an effort to bolster its application, resubmitted it in April of this year after a prior rejection in 2021, closely following the filing by industry giant BlackRock.
In July, Cathie Wood’s firm made further amendments to align its application with BlackRock’s, addressing concerns from the Commission regarding market manipulation and introducing a surveillance-sharing agreement. Notably, Alistair Milne, a distinguished Bitcoin investor and co-founder/CIO at Altana Digital Currency Fund, remarked that the latest amendments indicate Ark is actively engaging with the SEC’s feedback, marking a significant step forward in the application process.
The recent filing underscores environmental apprehensions and the potential implications of illicit transactions on both the Bitcoin industry and investments in the Trust. Bloomberg’s ETF expert, Eric Balchunaus, observed that the latest version includes “five extra pages” with pertinent information dispersed throughout. He characterized this as a “good sign” and a “solid progress” towards achieving the industry’s inaugural spot Bitcoin ETF approval.
With these enhancements and an increasingly constructive dialogue with regulatory authorities, Ark Invest is demonstrating its commitment to paving the way for a Bitcoin ETF and potentially reshaping the landscape of cryptocurrency investments.