Leading crypto fund manager Grayscale is calling on the Securities and Exchange Commission (SEC) to approve all proposed spot Bitcoin exchange-traded funds (ETFs) simultaneously. In a recent letter submitted by Grayscale’s chief legal officer, the firm argues against the SEC picking “winners and losers” and emphasizes the need for fair and orderly decision-making. Grayscale contends that spot Bitcoin ETFs are intrinsically linked to Bitcoin futures ETFs, which the SEC has previously approved, making them suitable candidates for approval. Additionally, Grayscale questions the significance of surveillance sharing agreements (SSAs) between Coinbase and spot ETF providers, asserting that they do not meet the SEC’s standards.
Grayscale Advocates Simultaneous Approvals
Grayscale’s legal team has penned a letter to the SEC concerning eight spot Bitcoin ETF filings, including Grayscale’s own. The company urges the SEC not to favor one proposal over the others, emphasizing the importance of an equitable decision-making process. Grayscale believes that since Bitcoin futures ETFs have already been approved, spot ETFs should also be considered as the two are interconnected.
Surveillance Sharing Agreements under Scrutiny
Grayscale addresses recent surveillance sharing agreements (SSAs) between Coinbase and spot ETF providers, including Invesco, BlackRock, Valkyrie, VanEck, Wisdom, Fidelity, and ARK Invest. These agreements aim to enable the SEC to monitor potential market manipulation or irregular trading activity. However, Grayscale asserts that SSAs would not be necessary under the SEC’s standards since Coinbase is not registered with the SEC as a securities exchange or broker-dealer, nor with the Commodity Futures Trading Commission (CFTC) as a futures exchange.
Potential Benefits for Investors
Grayscale highlights the significance of its Grayscale Bitcoin Trust (GBTC), which currently serves as an investment vehicle to track Bitcoin’s price. The firm suggests that converting GBTC into a spot Bitcoin ETF would deliver substantial value to its nearly 1 million investors. Grayscale contends that there is no valid reason for the SEC to withhold a spot Bitcoin ETF from GBTC investors.
Background on SEC’s Prior Decision
The SEC previously denied Grayscale’s application to convert GBTC into a spot Bitcoin ETF in June. In response, Grayscale filed a lawsuit against the regulator, accusing it of arbitrary decision-making and inconsistent treatment of similar investment vehicles.
Grayscale’s call for simultaneous approvals of spot Bitcoin ETFs reflects its commitment to fair and equal treatment among various proposals. As the debate over the significance of surveillance-sharing agreements continues, Grayscale argues that spot ETFs are closely intertwined with Bitcoin futures ETFs, and therefore both should be subject to a consistent regulatory approach. The SEC’s decision will undoubtedly impact the future of cryptocurrency ETFs and could potentially open new avenues for investors seeking exposure to the crypto market.