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SEC again delays decision on Grayscale’s Bitcoin ETF

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Grayscale’s application for a Bitcoin (BTC) exchange-traded fund (ETF) has been postponed yet again by the Securities and Exchange Commission (SEC), citing concerns about manipulation, liquidity, and transparency.

In fact, the SEC highlighted reservations about the digital asset manager’s plan to transform its Grayscale Bitcoin Trust (GBTC) into a spot ETF in a notice released Friday afternoon. Grayscale’s plan, in particular, did not persuade the regulator that it was intended to prevent alleged Bitcoin market fraud and manipulation. The SEC has encouraged the public to weigh in on these matters. Giving interested parties 21 days to submit written responses.

As previously reported, Grayscale petitioned the SEC in October to convert GBTC shares into a spot Bitcoin ETF. The Securities and Exchange Commission postponed Grayscale’s application less than two months later. Bitwise has proposed a similar idea.

Additionally, Grayscale is the world’s largest digital asset manager, with $36.5 billion in assets under management as of February 4. The GBTC product accounts for over 71% of the company’s total assets.

Besides, the SEC has been much more receptive to a futures-linked Bitcoin ETF than it has been to a spot Bitcoin ETF. The first Bitcoin futures fund in the United States, the ProShares Bitcoin Strategy ETF, acquired approval in October. Shortly after, the SEC approved two Bitcoin-linked Strategy ETFs from Valkyrie and VanEck.

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