The US Securities and Exchange Commission, or SEC, has formally denied an application to create an ARK 21Shares Bitcoin Exchange Fund (ETF).

In a filing Thursday, the Securities and Exchange Commission (SEC) rejected a proposed rule change for the Chicago Board Options Exchange, Cboe or BZX Exchange to list and trade shares in the ARK 21Shares Bitcoin (BTC) ETF. The SEC said the proposed rule change, which was originally posted for comment in the Federal Register in August 2021, would not be “intended to prevent fraudulent and manipulative activities and practices” or “to protect investors and the public interest.”

The Securities and Exchange Commission stated that the Cboe BZX exchange did not comply with the listing requirements for a financial product in accordance with the Code of Practice as well as the requirements of exchange law. Under these restrictions, exchanges wishing to list a bitcoin ETF must have a “comprehensive joint supervision agreement with a large-scale regulated market linked to the underlying or benchmark bitcoin assets.”

21Shares, a Europe-based issuer of exchange-traded products, applied for a Bitcoin spot ETF with Ark Investment Management in June 2021 to be listed on the Cboe BZX exchange under the ticker symbol ARKB. The Securities and Exchange Commission had 180 days to make a decision or open the proposal for public comment. In January 2022, the regulator extended the discussion window until April.

So far, the Securities and Exchange Commission (SEC) has not approved any crypto ETF applications for listing in the US, but it has given the green light to investment vehicles related to Bitcoin futures, including offers from ProShares, VanEck and Valkyrie. As of October 2021, 21Shares was one of the largest institutional issuers of cryptocurrency with over $2 billion in assets under management.

Related: The SEC Could Approval A Bitcoin ETF As Early As 2023

Grayscale, one of the next asset managers likely to hear the decision of the Bitcoin ETF regulator, launched a campaign in February to encourage US investors to submit their comments to the SEC. The regulator is expected to make a decision on converting Grayscale from Bitcoin Trust to BTC ETF on July 6.

Source: CoinTelegraph