Grayscale CLO Urges SEC: Green Light All Bitcoin Spot ETFs Now

In a bid to pave the way for the much-anticipated era of spot Bitcoin Exchange-Traded Funds (ETFs), Grayscale’s Chief Legal Officer, Craig Salm, has made a compelling case for the Securities and Exchange Commission (SEC) to approve all spot ETF applications simultaneously. Grayscale’s legal team has submitted a letter regarding the recent eight spot ETF filings, arguing the SEC shouldn’t pick “winners and losers”.

Grayscale Calls For Bitcoin ETF Approval

Highlighting the interconnectedness between Bitcoin’s spot and futures markets, Salm argues, “The SEC is already in a position to approve spot BTC ETFs based on its previous approval of Bitcoin futures ETFs. BTC’s spot and futures markets are inextricably linked (as evidenced by third-party studies showing 99% correlation).” This indicates that surveillance of the regulated CME Bitcoin futures market could effectively safeguard against potential fraud or manipulation in the spot market.

Grayscale also emphasizes its commitment to supporting measures that enable investors to access the crypto ecosystem while fostering oversight in centralized crypto markets. Although an agreement with a spot Bitcoin market (Surveillance Sharing Agreement, SSA) is not a “silver bullet” for securing spot ETF approval, accor Grayscale remains steadfast in its support for regulatory compliance.

“Although we do not believe the introduction of an SSA with a spot Bitcoin market is or should be the ‘silver bullet’ to getting spot Bitcoin ETFs approved in the US, as an organization with a deep history of embracing US financial rules and regulations […] We will also take any action necessary to convert GBTC to an ETF,” Salm affirmed, adding:

The SEC’s actions related to Bitcoin ETFs should be done in a fair and orderly manner. As a disclosure-based regulator, the SEC should not pick winners and losers.

Furthermore, Salm asserts that the SEC should provide consistent and equitable feedback or guidance to issuers without playing favorites. He underlines the significance of approving all spot ETF applications simultaneously, ensuring that American investors are protected and have access to diverse BTC investment opportunities.

GBTC, holding over $18 billion in assets under management, represents a flagship BTC fund that has been persistently seeking conversion into a spot ETF. The green light for spot ETFs would grant institutions a gateway to BTC exposure without directly holding the digital asset, further endorsing crypto as a legitimate asset class.

While a flurry of spot Bitcoin ETF applications has inundated the SEC’s desk, the regulator has been cautious in its approach, voicing concerns about potential fraud and manipulation. BlackRock, Fidelity, WisdomTree, and Invesco are among the prominent firms vying for approval, turning the race into a regulatory challenge.

Addressing the SEC’s apprehensions, some applicants, including BlackRock, have finalized surveillance-sharing agreements with crypto exchange Coinbase, designed to ensure comprehensive monitoring of markets and investigate potential manipulation.

At press time, the BTC price stood at $29,133.