On Thursday, Grayscale submitted a number of comment letters in which it argued that all Bitcoin ETF applications that had been submitted to the US SEC should get approval at the same time.
Craig Salm, the Chief Legal Officer of Grayscale, said in a statement that the actions of the Securities and Exchange Commission (SEC) regarding Bitcoin ETFs should be carried out in an orderly and fair way.
He said that since the regulator is disclosure-based, it should not choose losers and winners.
Grayscale’s moves
The total assets under management of the Grayscale Bitcoin Trust (GBTC) stand at about $18 billion and investors are able to get exposure to the pioneer cryptocurrency through it.
The company has filed a lawsuit against the SEC because of repeated rejections of its request to convert its flagship Bitcoin fund into a spot BTC ETF.
With a spot Bitcoin ETF, institutions would not be required to hold Bitcoin in order to invest in the cryptocurrency.
The crypto community views it as a way of ensuring Bitcoin adoption on a large scale and it would also give Bitcoin a stamp of approval as an asset class.
Bitcoin ETF
Last month, a number of Bitcoin ETF applications reached the SEC’s desk after one of the largest asset managers, BlackRock, also submitted an application.
Companies like WisdomTree, Fidelity, and Invesco all submitted applications of their own, which transformed the approval for ETFs into a footrace.
When it comes to approving a spot Bitcoin ETF, the SEC has been turning applications down for over a decade now because of concerns about manipulation and fraud.
The securities regulator had said last month that the applications of Fidelity and BlackRock had been insufficient because the surveillance-sharing agreements for market monitoring were not enough.
The pricing of futures-based ETFs depends on contracts that are made on commodity exchanges like the CME, while with spot-based ETFs, investors have direct exposure to the ETF, which is bitcoin in this case.
The progress
Since then, both BlackRock and Fidelity have refined their respective applications, as well as some other companies.
In order to address the concerns of the SEC, BlackRock stated that it was working on a surveillance agreement with Coinbase, the US-based crypto exchange.
According to the surveillance-sharing agreement, Nasdaq and Coinbase would work together for providing market data for trades and orders to the exchange.
Nasdaq would also have the ability to investigate potential manipulation by asking Coinbase to provide information.
A number of futures-based Bitcoin ETFs have already been approved by the SEC, which includes one that is leveraged.
According to Grayscale, this should be enough to give approval to a spot Bitcoin ETF as well. Salm said that the futures and spot markets of Bitcoin are linked.
Therefore, the surveillance agreement for products that are under the regulation of the CFTC should be sufficient.
In March, the judge overseeing the case between the SEC and Grayscale had shown some sympathy for the latter and had scrutinized the former’s reluctance to give approval.