Crypto fund manager Grayscale has urged the US Securities and Exchange Commission (SEC) to approve all proposed spot bitcoin exchange-traded funds (ETFs) simultaneously, to avoid favoring certain applicants over others. Grayscale's Chief Legal Officer, C Raig Salm, posted on July 27 , stating that the SEC should not be picking "winners and losers" but rather making fair and orderly decisions. The letter filed by Grayscale's legal team addresses eight spot bitcoin ETF filings, including its own, and argues that spot ETFs and bitcoin futures E TFs are "inextricably linked," suggesting that the SEC's approval of the latter should pave the way for the former.
The letter further discusses Coinbase's recently concluded supervisory sharing agreements (SSAs) with spot ETF providers, asserting that these agreements do not meet the SEC's standards. Several ETF filings from major players such as Invesco, BlackRock, Valkyrie, VanEck, Wisdom, Fidelity, and ARK Invest have recently been updated to include Coinbase's SSA. The agreement allows Coinbase to share trading account information and other data with the SEC to monitor for market manipulation and irregular trading activity.
Grayscale highlights that the SEC's claim that SSAs are necessary due to potential market manipulation in crypto markets is not valid for Coinbase. According to the company, Coinbase is not registered as a securities exchange or broker-dealer with the SEC, nor is it registered as a futures exchange with the Commodity Futures Trading Commission. Grayscale asserts that the SEC's standards for SSAs would neither be sufficient nor necessary in Coinbase's case.
The Grayscale Bitcoin Trust (GBTC), which aims to track bitcoin's price, has nearly 1 million investors. Grayscale claims that converting GBTC into an ETF would return billions of dollars to investors. They argue that the SEC has no reason to prevent GBTC investors from buying a spot bitcoin ETF. In June, the SEC rejected Grayscale's application to convert GBTC into a spot bitcoin ETF, leading Grayscale to sue regulators, alleging arbitrary action and inconsistent treatment of similar investment vehicles.
Grayscale's letter seeks a more comprehensive and even-handed approach to approving spot bitcoin ETFs, ensuring that all applicants are treated fairly and uniformly by the SEC.
