Ark Invest, in collaboration with 21Shares, has made a move to establish the first spot Ethereum exchange-traded fund (ETF) in the United States. The application was submitted to the Securities and Exchange Commission (SEC) on Wednesday, according to a filing. The proposed ETF, named ARK 21Shares Ethereum ETF, aims to offer investors direct access to Ethereum and will be listed on the Cboe BZX Exchange.
Coinbase (NASDAQ:COIN) has been named as a custodian in Ark Invest's application, indicating that the crypto exchange would hold onto Ethereum backing the shares of Ark Invest's ETF. Other roles clarified in the filing include 21Shares as the sponsor, Delaware Trust Company as the trustee, and Coinbase Custody Trust Company handling custodial duties. ARK Investment Management will act as the trust's sub-adviser and assist in promoting the shares.
The application resembles those for spot Bitcoin ETFs that were recently delayed by the SEC. The regulator said last week that it needs more time to decide on several following Grayscale's recent courtroom victory. Anticipation has grown that the SEC could approve a wave of Ethereum futures ETFs, which track the price of derivatives traded on the Chicago Mercantile Exchange (CME), as soon as October.
The SEC has received multiple applications for futures-based Ethereum ETFs. However, Ark Invest's bid seems to be a step beyond that, considering futures-based Bitcoin ETFs have been trading in the U.S since ProShares' launch on the New York Stock Exchange in 2021.
In Ark Invest's application, the firm proposes that the Cboe BZX Exchange's ability to obtain information about activity in the CME's Ethereum futures market should be sufficient to abate concerns previously articulated by the SEC. This proposal comes after a recent decision by the U.S. Court of Appeals for the D.C. Circuit which sided with Grayscale, stating that market manipulation concerns were not coherent enough given that futures-based Bitcoin ETFs have been approved in the past.
Despite this move towards an Ethereum-based ETF, approval from SEC is still pending. The regulator has shown caution recently by postponing decisions on several spot Bitcoin fund applications just last month.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.