Grayscale Urges SEC to Approve Bitcoin ETF Expeditiously
In a letter sent to the Securities and Exchange Commission (SEC), lawyers representing Grayscale Investments, a crypto asset manager, have called for the swift approval of a spot Bitcoin exchange-traded fund (ETF). This follows Grayscale’s recent court victory against the SEC.
The letter, delivered by law firms Davis Polk and Munger Tolles & Olson, comes after a ruling by the U.S. Court of Appeals for the D.C. Circuit that deemed the SEC’s rejection of Grayscale’s proposed Bitcoin ETF as unjustified. The SEC now has to review the application again, although it still has the option to appeal.
The lawyers argue that the SEC should treat Grayscale’s Bitcoin Trust in the same way it treats Bitcoin futures ETFs, which it has already approved. Grayscale contends that its spot Bitcoin ETF uses the same market surveillance arrangement with the Chicago Mercantile Exchange (CME) that the SEC has deemed adequate for Bitcoin futures ETFs.
A spot Bitcoin ETF would provide mainstream investors with exposure to Bitcoin without the need to directly own the cryptocurrency. The SEC has previously rejected all spot Bitcoin ETF applications, citing concerns about potential market manipulation.
Hot Take:
The lawyers representing Grayscale Investments are urging the SEC to expedite the approval of a spot Bitcoin ETF. They argue that there are no valid reasons to treat the trust differently from Bitcoin futures ETFs that the SEC has already approved. Grayscale’s recent court win against the SEC reinforces their position. If approved, a spot Bitcoin ETF would offer mainstream investors a convenient way to access Bitcoin without directly owning it. The lawyers emphasize that the SEC’s lengthy review of Grayscale’s application has surpassed the deadlines outlined in securities law, raising questions about the agency’s timely actions. They also highlight the harm caused to investors by the discount on Grayscale’s Bitcoin Trust shares. With new competition emerging and recent inflows into Bitcoin futures ETFs, the lawyers stress the need for a level playing field and express Grayscale’s readiness to operate its Bitcoin Trust as an ETF.
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