Grayscale Appeals to SEC: Approve All Spot Bitcoin ETFs Simultaneously for Fairness and Transparency

Grayscale is now urging the Securities and Exchange Commission (SEC) to take a fair and orderly approach by approving all proposed spot Bitcoin ETFs simultaneously. In a post on July 27, Grayscale’s Chief Legal Officer, Craig Salm, outlined the company’s reasoning and its legal team’s submission of a letter supporting this stance.

Grayscale’s legal team submitted the comment letter in response to eight spot Bitcoin ETF filings, which included Grayscale’s own ETF proposal. The company firmly argues that the SEC should avoid picking “winners and losers” among the applicants and instead make a comprehensive and equitable decision that would benefit the entire market and investors.

The comment letter highlights a few key points that Grayscale believes support its case. First and foremost, the letter emphasizes that the SEC is already in a position to approve spot Bitcoin ETFs based on its previous approval of Bitcoin futures ETFs. Grayscale points out the inextricable link between Bitcoin’s spot and futures markets, as third-party studies have shown a staggering 99% correlation. Given the robust surveillance measures in place for the CME Bitcoin futures market—a market regulated by the Commodity Futures Trading Commission (CFTC) and a member of the Intermarket Surveillance Group—the comment letter asserts that this surveillance should be sufficient to protect against potential fraud or manipulation in the underlying spot Bitcoin market.

While Grayscale acknowledges that implementing surveillance sharing agreements (SSAs) with spot Bitcoin markets is a positive step towards increasing oversight, it does not consider SSAs to be the sole solution for obtaining SEC approval. Nevertheless, the company maintains its commitment to supporting any efforts that enable investors to access the crypto ecosystem and welcomes progress that brings more transparency and accountability to centralized crypto markets.

In its plea for fair and orderly regulatory actions, Grayscale emphasizes that the SEC should provide consistent and equitable feedback or guidance to all issuers seeking approval for spot Bitcoin ETFs. The goal is to ensure that the SEC’s decisions align with its role as a disclosure-based regulator, promoting a level playing field for all market participants.

Grayscale’s ultimate aim is to secure approval for its GBTC (Grayscale Bitcoin Trust) to convert into an ETF. The company believes that such a move would not only bolster investor confidence but also unlock billions of dollars in value for nearly one million investors across all 50 states who currently own GBTC.

The cryptocurrency community and American investors have been eagerly awaiting the SEC’s decision on spot Bitcoin ETFs, and Grayscale’s call for simultaneous approvals is gaining momentum. The company’s rationale aligns with the increasing maturation of the Bitcoin spot market, which strengthens its case for American investors to have access to spot Bitcoin ETFs.

Grayscale’s advocacy for fair treatment and regulatory clarity in the crypto space is likely to resonate with many in the industry. As the crypto market continues to evolve and mature, investors and market participants are hopeful that the SEC will consider Grayscale’s arguments seriously and make a decision that supports the growth and accessibility of cryptocurrencies for all.

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