Grayscale, the asset management company, recently sent a letter to the Securities and Exchange Commission (SEC) on July 27, expressing a cautious view regarding the approval of Bitcoin ETFs for immediate trading and the sharing of oversight with Coinbase. They argued that such an arrangement does not meet the current standards applied by regulatory authorities.
At present, the SEC is reviewing proposals for Bitcoin ETFs from various fund managers, including BlackRock, Ark Invest, Invesco, Fidelity, VanEck, and Valkyrie. However, no proposals have been approved yet, and earlier, Grayscale’s attempt to convert its flagship GBTC fund into an ETF for immediate trading was rejected, leading to a lawsuit against the SEC from the company.
Grayscale believes that sharing oversight between an exchange and an ETF is not a new concept, but Coinbase is not registered with market regulatory agencies as a national securities exchange broker-dealer.
Grayscale’s lawyers argue that the SEC has the capability to approve an ETF for immediate trading if it chooses to, using the standards that have been applied to future Bitcoin ETFs. They claim that any recent actions approving registration would reflect a significant and sudden change in the standards applied by the Commission, creating an unfair advantage for the first mover and a biased proposal.
SEC Chairman Gary Gensler continues to express skepticism about the cryptocurrency market when asked about pending applications in a television interview on July 27.
Grayscale’s legal team has criticized the SEC for allowing leveraged trading for Bitcoin ETFs while previously rejecting their efforts for an ETF with immediate trading.
This indicates that the approval of Bitcoin ETFs for immediate trading still faces many challenges and requires careful consideration by regulatory authorities before a final decision is made.