Grayscale, a leading crypto fund manager, is calling on the Securities and Exchange Commission (SEC) to approve all proposed spot Bitcoin exchange-traded funds (ETFs) simultaneously to avoid giving any one proposal an advantage. In a letter submitted to the SEC, Grayscale’s chief legal officer, Craig Salm, argued against the SEC picking “winners and losers” and instead emphasized the importance of a fair and orderly decision-making process.
The letter highlighted that the SEC has previously approved Bitcoin futures ETFs and stated that spot ETFs should also be approved based on the linkage between the two fund types. Grayscale further noted that recent surveillance sharing agreements (SSAs) between Coinbase and spot ETF providers should not be considered as meeting the SEC’s standards. The SSAs allow Coinbase to share information on its trading books and other relevant data, enabling the SEC to monitor for potential market manipulation or irregular trading activity.
Several ETF filings from major firms including Invesco, BlackRock, Valkyrie, VanEck, Wisdom, Fidelity, and ARK Invest have been updated to include SSAs with Coinbase. However, Grayscale argued that these agreements are not necessary under the SEC’s standards, as Coinbase is not registered with the SEC as a securities exchange or broker-dealer, nor with the Commodity Futures Trading Commission (CFTC) as a futures exchange.
Grayscale emphasized that approving the spot BTC ETFs would signify a significant and sudden change in the SEC’s application of its standard. It argued that such approval would grant an unfairly discriminatory and prejudicial first-mover advantage to the proposals.
According to Salm, the Grayscale Bitcoin Trust (GBTC), which aims to track Bitcoin’s price, has nearly 1 million investors. He stressed that converting GBTC to an ETF would provide significant value to investors and stated that there is no reason why GBTC investors should be deprived of a spot Bitcoin ETF opportunity.
It should be noted that the SEC previously denied Grayscale’s application to convert GBTC to a spot Bitcoin ETF in June. In response, Grayscale filed a lawsuit against the regulator, accusing it of acting arbitrarily by not applying consistent treatment to similar investment vehicles.
The push for spot Bitcoin ETF approvals comes as the crypto industry continues to gain mainstream recognition and interest from institutional investors. ETFs are seen as a convenient and accessible way for investors to gain exposure to cryptocurrencies without directly holding the assets. If approved, these ETFs would provide another avenue for investors to participate in the growth of the crypto market.
The SEC’s decision on spot Bitcoin ETFs is highly anticipated by the crypto community, as it could potentially open the door for greater institutional adoption and pave the way for further regulatory clarity in the industry. Grayscale’s call for simultaneous approval of all proposals aims to ensure fairness and equal opportunities for all market participants.