Ark Invest, 21Shares bend the knee to SEC’s cash creates edict to allow cash creations and redemptions

• ARK Invest has bent the knee, joining the cash creations club in order to make it to the starting gate.
• It joins Valkyrie, Fidelity Investments, and Invesco, with an ETF specialist anticipating BlackRock joining the list.
• Meanwhile, the SEC has gone for early delays for the Hashdex and Grayscale Ethereum ETF filings, missing their December 18 deadlines.

Ark Invest and 21Shares, two firms associated with Cathie Wood, have capitulated to the US Securities and Exchange Commission (SEC), which according to specialists, may be insisting, “cash creates or you will wait.”

Also Read: SEC allegedly wants spot Bitcoin ETFs to do cash creates, not crypto, after possible meet-up with exchanges

Ark Invest and 21Shares to do cash redemptions

Ark Invest and 21Shares have joined the “cash creations club,” according to Eric Balchunas and James Seyffart, exchange-traded funds (ETF) specialists with Bloomberg Intelligence.

The report comes after the firms’ S-1 amendment for a spot Bitcoin ETF, with Seyffart indicating, “Looks like they are accepting the SEC's edict of only allowing cash creations and redemptions (at least to start).”

Ark 21Shares S-1 amendment excerpt

With the two firms joining the list, finance lawyer Scott Johnson believes it will be all cash creates for the remaining players.

BlackRock caves in as WisdomTree files fourth amendment

Recent developments also indicate that BlackRock has also caved in, submitting its S-1 amendment with an excerpt stating, “These transactions will take place in exchange for cash. Subject to the in-kind Regulatory Approval, these transactions may also take place in exchange for bitcoin.”

Elsewhere, WisdomTree, another institutional player, has also filed the fourth amendment to its spot BTC ETF application.

SEC is not budging, Eric Balchunas

With the list of institutions bending the knee to the SEC’s decree for cash creates, Balchunas opines that “the SEC is not budging,” adding, “[this] is probably good if you looking for January approval because we at 11th hour, holidays about to hit.”

His statement comes from a place of certainty that Ark Invest and 21Shares never wanted to do cash creations, so much so that they had even worked out an alternative way to do in-kind creations.

Amid the back and forth between cash creates (cash redemptions) and in-kind creates (crypto redemptions, the financial regulator has delayed Hashdex and Grayscale Ether ETFs which were due on December 18.

Difference between cash creates and in-kind creates here.

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