United States securities and exchange commission logo
December 21, 2023
Hany Rashwan
Chief Executive Officer
Ark 21Shares Bitcoin ETF
c/o 21Shares US LLC
477 Madison Avenue
New York, NY 10022
Re: Ark 21Shares
Bitcoin ETF
Amendment No. 4 to
Registration Statement on Form S-1
Filed December 18,
2023
File No. 333-257474
Dear Hany Rashwan:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our December 6, 2023
letter.
Amendment No. 4 to Registration Statement on Form S-1
The Trust's Investment Objective, page 3
1. Please revise your
disclosure here and elsewhere as appropriate to clarify, if true, that the
Authorized Participants
will not direct the Trust or any third party with respect to
purchasing, holding,
delivering, or receiving bitcoin as part of the creation or redemption
process. Please also
clarify, if true, that the Trust will be responsible for selecting the
Bitcoin Counterparty to
purchase or sell the bitcoin.
2. Please revise to
identify the Bitcoin Counterparties with whom the Sponsor has entered
into an agreement.
Hany Rashwan
FirstName LastNameHany
Ark 21Shares Bitcoin ETF Rashwan
Comapany21,
December NameArk
2023 21Shares Bitcoin ETF
December
Page 2 21, 2023 Page 2
FirstName LastName
Risk Factors, page 15
3. Please revise your risk factors to discuss the impact of the use of
cash creations and
redemptions on the efficiency of the arbitrage mechanism and how this
compares to the
use of in-kind creations and redemptions.
4. To the extent material, please include risk factor disclosure that
addresses the risks related
to your Bitcoin Custodian and Prime Broker acting in the same capacity
for several
competing products.
The inability to recognize the economic benefit , page 28
5. Please revise your discussion of Incidental Rights here and throughout
the prospectus to
clarify, if true, that the only crypto asset to be held by the Trust
will be bitcoin.
Net Asset Value Determinations
Calculation of Principal Market NAV and Principal Market NAV per Share, page 72
6. We acknowledge your response to comment 8. Please note that we are
continuing to
consider your response.
Prime Broker, page 84
7. We note your response to prior comment 10. Please revise to quantify
or otherwise
describe whether there are any limits on the amount of bitcoin that
may be held in the
Trading Balance.
8. Please revise to quantify or otherwise describe the maximum amount of
Trade Credit that
the Post-Trade Financing Agreement permits to be outstanding at any
one time. In
addition, please disclose the Trade Credit interest rate. Also
disclose the Sponsor's policy
regarding when it would utilize Trade Credits (creations, redemptions,
payment of
Sponsors fee, etc.) and whether it generally intends to fund the
Trading Balance at the
Prime Broker with sufficient cash or bitcoin or whether it regularly
expects to utilize the
Post-Trade Financing Agreement.
Creation and Redemption of Shares, page 92
9. Please disclose who will be responsible for the on-chain transaction
fees for creation and
redemption transactions and any transactions with the Prime Broker.
Cash Creation, page 93
10. Please revise to clarify what you mean by the disclosure that on the
settlement date, the
Sponsor will liaise with the Authorized Participant to settle the
underlying assets,
including what you mean by the terms "liaise" and "underlying assets."
Hany Rashwan
FirstName LastNameHany
Ark 21Shares Bitcoin ETF Rashwan
Comapany21,
December NameArk
2023 21Shares Bitcoin ETF
December
Page 3 21, 2023 Page 3
FirstName LastName
Potential In-Kind Creation and Redemption of Shares, page 97
11. To the extent the Trust will not permit in-kind transactions when the
product launches,
please remove the second and third paragraphs of this section. Please
also revise to clarify
that the timing of applicable regulatory approval is unknown and that
there is no guarantee
that such regulatory approval will be received. Please also confirm
your understanding,
consistent with the undertaking required by Item 512(a)(1)(iii) of
Regulation S-K, that you
will file a post-effective amendment to include any material
information with respect to
the plan of distribution not previously disclosed in the registration
statement or any
material change to such information.
Please contact Kate Tillan at 202-551-3604 or Michelle Miller at
202-551-3368 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or Justin Dobbie at 202-551-3469 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Crypto
Assets