SEC Delays Decision on Grayscale Spot Bitcoin ETF, Requests Public Comment

SEC Delays Decision on Grayscale Spot Bitcoin ETF, Requests Public Comment
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US Securities and Exchange Commission (SEC) has again postponed its decision on whether to approve Grayscale’s application for a spot Bitcoin ETF.

In a notice published on Friday, February 4, the SEC stated that it was not convinced that Grayscale’s application for converting its Grayscale Bitcoin Trust (GBTC) into a Grayscale spot Bitcoin ETF had addressed all the concerns around manipulation, liquidity, and transparency. The SEC has now invited the public to comment on these issues, giving interested parties 21 days to respond in writing.

The SEC notice reads:

“Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.”

Grayscale’s Application for Spot Bitcoin ETF

Grayscale is the world’s largest digital asset manager with $36.5 billion in assets under management (AUM) as of February 4. The firms’ flagship investment product is its Grayscale Bitcoin Trust (GBTC) which accounts for over 71% of its total assets under management (AUM).

The firm first announced its plans to convert its Grayscale Bitcoin Trust (GBTC) to a Grayscale Bitcoin Spot ETF in October 2021. Grayscale submitted an application with the SEC in October 2021 but, in December 2021, the US regulator initially postponed the decision whether to approve or reject Grayscale’s application and a similar proposal put forward by Bitwise. According to the notice published on December 15, 2021, the SEC announced February 6, 2022, as the next date for the decision.

In the latest February 4 notice, the US Securities and Exchange Commission (SEC) has again delayed its decision on Grayscale’s application to convert its Bitcoin Trust GBTC to a Spot Bitcoin ETF. The regulator said that it was not convinced that Grayscale Spot Bitcoin ETF was designed to prevent alleged fraud and manipulation in the Bitcoin market.

SEC has turned towards the public to get additional analysis on Grayscale proposal to launch a spot Bitcoin ETF. The notice reads:

“Interested persons are invited to submit written data, views, and arguments regarding  whether the proposal should be approved or disapproved by [insert date 21 days from publication in the Federal Register]. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by [insert date 35 days from publication in the Federal Register].”

While the SEC does not look much attracted towards spot Bitcoin ETFs, strategy Bitcoin ETFs are flowing freely in the market. As Crypto Economy reported, Bitcoin registered a new ATH when the world’s first Bitcoin strategy ETF BITO by ProShares went on NYSE on October 19, 2021.


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