United States securities and exchange commission logo
January 5, 2024
Hany Rashwan
Chief Executive Officer
Ark 21Shares Bitcoin ETF
c/o 21Shares US LLC
37 West 20th Street, Suite 1101
New York, NY 10011
Re: Ark 21Shares
Bitcoin ETF
Amendment No. 5 to
Registration Statement on Form S-1
Filed December 28,
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 21,
2023 letter.
Amendment No. 5 to Registration Statement on Form S-1
General
1. We refer you to your
responses to comments 2, 36, and 40 in your November 20, 2023
response letter. Please
update your responses to these comments in your next amendment
or tell us when you
intend to do so.
Cover Page
2. We note the disclosure
on the cover page regarding the Seed Capital Investor and their
status as a statutory
underwriter with respect to the Seed Creation Baskets. Please revise to
instead identify the
purchaser of the initial Basket and identify that party as a statutory
underwriter.
Hany Rashwan
FirstName LastNameHany
Ark 21Shares Bitcoin ETF Rashwan
Comapany
January NameArk 21Shares Bitcoin ETF
5, 2024
January
Page 2 5, 2024 Page 2
FirstName LastName
Risk Factors, page 15
3. We note the revisions you made in response to prior comment 3 and we
reissue the
comment in part. Please revise your risk factors to compare the impact
of the use of cash,
as opposed to in-kind, creations and redemptions on the efficiency of
the arbitrage
mechanism.
The inability to recognize the economic benefit of a "fork" or an "airdrop"
could adversely
impact an investment in the Trust, page 29
4. We note the revisions you made in response to prior comment 5 and we
reissue the
comment in part. Please revise the rest of this risk factor, as well
as your disclosure on
pages 83 and 105, for consistency with your disclosure that the only
crypto asset to be
held by the Trust will be bitcoin. In particular, please clarify, if
true, that with respect to
any fork, airdrop or similar event, the Sponsor will cause the Trust
to irrevocably abandon
the Incidental Rights or IR Virtual Currency and in the event the
Trust seeks to change
this position, an application would need to be filed with the SEC by
your listing exchange
seeking approval to amend its listing rules.
Net Asset Value Determinations
Calculation of Principal Market NAV and Principal Market NAV per Share, page 73
5. Refer to your responses to comment 6 in our September 29, 2023 letter
and related
subsequent comments. We note your revised disclosure that the Trust
will only allow cash
redemptions, and observe that this change may have an impact on your
fair value
accounting policy, including principal market determination under ASC
Topic 820. Please
confirm your understanding that our decision not to issue additional
comments should not
be interpreted to mean that we either agree or disagree with your
responses and your
current fair value accounting policy. Please also confirm your
understanding that we may
comment further on this matter in future filing reviews once the Trust
is operational.
Prime Broker, page 85
6. We note the revisions you made in response to prior comment 8 and we
reissue the
comment in part. Please revise to disclose whether the Sponsor
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 in
connection with
creation and redemption transactions or to pay expenses.
Cash Creation, page 95
7. You state that to the extent the execution price of the bitcoin
acquired by the Bitcoin
Counterparty exceeds the cash deposit amount, such cash difference
will be the
responsibility of the Authorized Participant and not the Trust or
Sponsor. For both
creation and redemption transactions, please revise to clarify whether
or not the interest
Hany Rashwan
Ark 21Shares Bitcoin ETF
January 5, 2024
Page 3
payable on Trade Credits utilized under the Post-Trade Financing
Agreement are included
in the execution price and therefore the responsibility of the Authorized
Participants. If
they are the responsibility of the Trust, please revise your risk factor
disclosure
accordingly to explain the impact such interest payments will have on the
net assets of the
Trust over time.
Cash Redemptions, page 97
8. In the second paragraph on page 98, you state that the Authorized
Participant will be
required to "prefund a cash amount" determined by the Sponsor and you
also refer to the
receipt of "the required cash" indicated in the redemption order. Please
explain why you
refer to cash rather than Shares when discussing redemption orders.
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 David Gessert at 202-551-2326 or Justin Dobbie at 202-551-3469 with any
other
questions.
Sincerely,
FirstName LastNameHany Rashwan
Division of
Corporation Finance
Comapany NameArk 21Shares Bitcoin ETF
Office of Crypto
Assets
January 5, 2024 Page 3
cc: Allison Fumai
FirstName LastName