Grayscale Requests SEC to Approve Bitcoin ETF Filings Simultaneously
A comment letter shared by the fast-growing asset management firm in Connecticut, Grayscale, urged the Securities and Exchange Commission (SEC) to approve the pending proposal on the spot Bitcoin exchange-traded funds (ETF). The letter was penned by Craig Salm, the Chief Legal Officer at Grayscale, highlighting the need to improve the accessibility of Bitcoin ETF in the US.
In his submission, the executive confirmed that the Grayscale legal team submitted a report concerning eight spot Bitcoin ETFs filings. The report requested the SEC to make an informed decision at the approval phase of the filing.
Salm and team confessed to have previously submitted Grayscale spot Bitcoin ETFs proposal joining other firms awaiting the SEC decision.
Grayscale Advocates for Accessible Bitcoin ETFs
According to Salm, the SEC should approve all the Bitcoin ETFs filings at the same time. This will prevent one firm from taking advantage of the others.
From his analysis, the executive noted that the Bitcoin spot market was approaching maturity. Therefore there should not be a winner and loser when approving the pending proposals.
Irrespective of this, Salm requested the SEC to treat the spot ETFs similar to Bitcoin futures ETFs. He explained the close relationship between the two fund types. A recent study revealed that Bitcoin Futures and Spots are “inextricably linked” with a 99% correlation.
In addition, referring to the SEC surveillance sharing agreement (SSAs), Salm expressed concerns that some proposals might fail to meet SEC preventive measures on potential fraud and manipulation. The executive noted that the SSAs agreement between Coinbase and spot ETF providers such as BlackRock, Wisdom, and ARK Invest, among others, might fail to meet the SEC standards.
However, Salm envisioned that SEC could reconsider its decision if Coinbase agreed to disclose vital information demonstrating that the crypto exchange did not engage in any illegal trading activity, such as market manipulation.
Recently the SEC rejected BlackRock’s spot ETF filling for failing to meet the SSAs standards. The market regulators argued that the spot ETF proposal submitted by BlackRock was not “sufficiently clear and comprehensive.”
Grayscale Urges SEC to Approve Bitcoin ETFs
The SEC decision prompted the applicants to revise their proposal and include Coinbase in the SSAs section. Commenting on the amended spot ETF filing, Salm argued that SSAs submitted might fail to meet the SEC standards since Coinbase is either registered as a securities or a futures exchange.
Even though Grayscale did not see the relevance of the SSAs in the spot Bitcoin market, the asset manager vowed to uphold compliance by implementing the US financial laws. The asset manager will support the government in improving the accessibility of crypto assets in the US.
Moreover, the Grayscale team praised the authority for striving to bring regulatory oversight on crypto assets. Salm and the team pledged to take the necessary steps to convert Grayscale Bitcoin Trust (GBTC) to an ETF.
At present, around 1 million US investors own GBTC. This implies that if the SEC approves the pending spot ETFs, the Grayscale team will introduce the GBTC holders to the spot Bitcoin market.
In their projection, the Grayscale team argued that converting the existing GBTC holding to ETFs will increase the investor’s value.
Grayscale Seeks to Convert GBTC to ETF
In June, the SEC pushed back Grayscale’s application to convert GBTC to spot Bitcoin. Following this Grayscale chief executive officer Michael Sonnenshein vehemently disagreed with the SEC decision.
The CEO announced plans to challenge the SEC decision by filing a petition. The Grayscale team lamented that since 2021 the SEC disapproved their spot ETF filing.
On the contrary after reviewing the Grayscale spot ETF application, the SEC argued that the asset manager failed to demonstrate effective ways it would implement to safeguard the investors from manipulation and illegal trading.
In a Twitter statement dated June 2022, Grayscale’s CEO expressed disappointment with the market regulators’ decision. Sonnenshein vowed to leverage Grayscale resources to push for fair regulatory treatment.
Editorial credit: Ascannio / Shutterstock.com
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