ARK Invest and 21Shares Dissolves Spot Ethereum ETF Partnership


21Shares has revised its application for an Ethereum spot ETF, renaming it from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF. Furthermore, ARK Invest has decided to terminate its collaboration with 21Shares, stepping away from involvement with the ETF.

Strategic Reassessment by ARK Invest

The updated Form S-1 indicates no changes to the fee structure. Despite acknowledging Ethereum’s significant potential and long-term value, a representative from ARK Invest stated that the firm will not move forward with an Ethereum ETF. The representative cited a strategic reassessment of its investment plans.

Notably, the dissolution decision does not affect the continued cooperation between 21Shares and ARK Invest on other ventures, such as the ARK 21Shares Bitcoin ETF launched earlier this year.

Collaboration and Product Offerings

Previously, in their partnership, 21Shares was the promoter of the ETF, with Delaware Trust Company acting as the trustee. Coinbase Custody Trust Company managed the secure holding of the underlying Ether assets, while ARK Investment Management functioned as a sub-adviser, focusing on marketing the shares to investors.

In addition to Bitcoin and Ethereum futures, the partnership also introduced the ARK 21Shares Blockchain and Digital Economy Innovation ETF, designed to invest in public equities of companies within the blockchain sector.

According to 21Shares, this ETF offers investors comprehensive exposure to the growth of blockchain technology.

Recent Developments and Future Prospects

On May 10, ARK Invest and 21Shares modified their spot Ether ETF proposal, eliminating plans to stake a portion of the fund’s assets through third-party providers. Their February 7 filing had mentioned that 21Shares expected to earn ETH from staking, intending to classify these rewards as fund-generated income.

In September 2023, ARK Invest and 21Shares filed an application for a spot Ether ETF, aiming to provide direct exposure to Ether and list the fund on the Cboe BZX Exchange, utilizing the CME CF Ether-Dollar Reference Rate – New York Variant.

Recently, the U.S. Securities and Exchange Commission approved 19b-4 forms for eight Ethereum ETFs. However, issuers still need their S-1 statements to become effective before trading can begin. There are predictions from some quarters that the spot Ether exchange-traded funds (ETFs) could launch by late June.

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