Bitcoin ETF Decision Looms: Grayscale Pushes for Simultaneous Approval
SEC Reviewing Equity for Bitcoin ETF Submissions; Grayscale Advocates Fair Consideration
The U.S. Securities and Exchange Commission (SEC) faces a pivotal moment as it evaluates various applications for spot bitcoin exchange-traded funds (ETFs). To ensure a level playing field, Grayscale Investments, a key player in the crypto investing scene, has appealed to the SEC to approve all pending filings in unison.
Grayscale emphasizes the importance of a fair and impartial review process, arguing against any undue advantages for specific applicants. This includes proposals from Ark 21 Shares, Invesco Galaxy, iShares (BlackRock), Valkyrie, VanEck, WisdomTree, and Wise Origin (Fidelity).
Grayscale's statement also contests the applicants' surveillance-sharing agreements with cryptocurrency exchange Coinbase. The concern is whether these agreements meet the SEC's stringent regulatory standards, especially with the absence of mandatory investigative authority and oversight by a dedicated market regulator.
Grayscale's Past Tussle with the SEC
Grayscale's previous bid to turn its Grayscale Bitcoin Trust (GBTC) into an ETF was rejected by the SEC. However, several bitcoin ETFs based on futures have received the commission's green light. In response to the rejection, Grayscale filed a lawsuit against the SEC in 2021.
GBTC, the world's largest bitcoin fund, is managed by Grayscale, a subsidiary of Digital Currency Group, also the parent company of CoinDesk. The fund offers institutional investors a way to gain exposure to bitcoin without directly possessing the asset. Notably, BlackRock's proposal for a spot Bitcoin ETF has narrowed the gap between GBTC's current trading price and the overall value of bitcoin.
A Case for Simultaneous Approval
Grayscale argues that decisions should be made equitably to safeguard investor protection and issuer fairness. If the SEC decides to approve any spot bitcoin ETF applications, all proposed applications, even those previously rejected, should receive simultaneous authorization, according to Grayscale.
For Insights:
- The SEC's approach to spot Bitcoin ETF filings is crucial in maintaining competitive fairness.
- Surveillance-sharing deals between ETF sponsors and cryptocurrency exchanges pose logistical and cost challenges due to the need for robust market surveillance and coordination.
- The SEC's emphasis on clear custody frameworks and jurisdictional clarity adds to the complexity of these arrangements.
- Simultaneous approvals can help avoid giving any competitor an unfair advantage in the rapidly evolving crypto market.
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- Grayscale Investments, in pressing for simultaneous approval of all pending bitcoin ETF applications, is aiming to ensure a level playing field for all applicants, including Ark 21 Shares, Invesco Galaxy, iShares (BlackRock), Valkyrie, VanEck, WisdomTree, and Wise Origin (Fidelity).
- Grayscale's call for equitable decision-making is grounded in its belief that such an approach is essential for safeguarding investor protection and issuer fairness.
- If the U.S. Securities and Exchange Commission (SEC) were to approve any spot bitcoin ETF applications, it would follow Grayscale's proposal for simultaneous authorization of all proposed applications, even those previously rejected.
- Grayscale's argument for simultaneous approvals seeks to prevent giving any competitor an unfair advantage in the quickly developing crypto market, given the logistical and cost challenges associated with surveillance-sharing deals between ETF sponsors and cryptocurrency exchanges.
