Due to concerns about manipulation, liquidity, and transparency, the US Securities and Exchange Commission (SEC) has postponed making a judgement on Grayscale’s pending application to convert its Bitcoin Trust into a spot ETF.
As expected, the SEC’s notice released on Friday included no surprises about Grayscale’s pending application.
The SEC expressly requests “written comments” from “interested people” in the general public addressing the regulator’s earlier concerns about market fraud, manipulation, and a general lack of transparency.
The notice continues by stating that the public has 21 days from today, as noted in the Federal Register, to submit written data, views, and arguments on whether or not Grayscale’s application should be approved or denied – with a deadline of 35 days from today for rebuttal to any particular submission.
The notice provides persons interested in submitting comments to the SEC with the option of doing so online or on paper.
To submit electronic comments, please use the SEC’s “Internet comment form” or send an email to [email protected] with the subject line “File Number SR-NYSEArca-2021-90.”
If you desire to submit comments through mail, please send multiple copies to “Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090.”
Grayscale, the world’s biggest digital asset management, submitted an application with the SEC in October to convert shares of its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, hoping to buck the regulator’s recent trend of rejecting BTC spot ETF applications.
Unfortunately, the SEC said two months later that it would be delaying its judgement on Grayscale’s application, citing concerns about market fraud, manipulation, and transparency. According to a recent tweet, Grayscale managed $36.5 billion in assets as of Feb. 4, with its GBTC product accounting for more than 71% of total assets.
SkyBridge and Fidelity
The SEC also denied Fidelity’s Wise Origin Bitcoin Trust at the end of January, only seven days after it rejected a proposal from First Trust and SkyBridge Capital for a spot bitcoin ETF.
Interestingly, in rejecting Fidelity, the SEC went into detail on surveillance-sharing agreements and the SEC’s responsibility to ensure that exchanges comply with the Exchange Act’s requirements.
It’s worth noting that the SEC authorised ProShares Bitcoin Strategy ETF – the first Bitcoin futures fund to be allowed in the United States – in October of that year, followed by Valkyrie and VanEck’s Strategy ETFs.
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