If the SEC refuses to approve her Bitcoin ETF, Grayscale says she is ready to sue as well. A final decision is expected on July 6, but for now there doesn’t seem to be much hope.
Grayscale Ready to Fight SEC for ETF Approval
This is revealed by Bloomberg quoting the CEO of Grayscale, Michael Sonnenshein. Grayscale has been trying for a long time to turn its GBTC (Grayscale Bitcoin Trust) fund into a full ETF, but the SEC opposes.
The opposition from the US stock market regulator refers specifically to the fact that it would be a ETF based on BTC itself, i.e. collateralized in tokens.
The fact is that on the one hand the SEC already authorized last year ETFs based on Bitcoin futureswhile on the other hand the CFTC, which regulates the futures market, has already authorized futures contracts based on BTC for several years.
Therefore, SEC-Licensed Bitcoin Futures ETFs Are Indirectly Based on Spot BTCand it’s hard to see why it shouldn’t also authorize ETFs based directly on spot BTC.
The matter is purely technical, as futures ETFs are subject to different rules than spot ETFs, and these seem to prevent the approval of such Bitcoin ETFs.
Grayscale has been trying for months to turn his nearly $30 billion fund based on spot Bitcoin in an ETF, and now says it is willing to take legal action against the SEC if it refuses again.
The deadline for the SEC to rule on the application to convert Grayscale Bitcoin Trust into an ETF is July 6.
Lawsuits against the SEC: the value of the GBTC fund will increase
Davis Polk Lawyers they had already submitted a comment letter to the SEC in late November on behalf of Grayscale to support the approval of the spot Bitcoin ETF, without producing any changes.
In addition, other 2,700 letters reached the SEC during the standard 240-day review period for these applicationsSo much so that Grayscale’s CEO called this “extremely encouraging.”
GBTC has been around since 2015, giving ample proof over the years of its reliability and security. It is currently trading at a 20% discount to NAV, but according to Sonnenshein, the NAV and the price of the fund should converge when converted.
Traditional finance and crypto: the meeting will have to happen sooner or later
Furthermore, the CEO is convinced that sooner or later a spot Bitcoin ETF will be approved in the USso you probably can’t take no for an answer.
There are also several other similar requests from other companies, some of which have already been rejected. This appears to be a battle between traditional finance and the new cryptocurrency market, which is obviously much more open to innovation and change.
It cannot be ruled out that any new cryptographic regulation in the US could favor or disfavor this process.