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The U.S. Securities And Exchange Commission (SEC) Requested Public Comments For Grayscale’s Spot Bitcoin ETF Application, Which Adds At Least 35 Days Of Delay Before A Possible Approval

The U.S. SEC is getting increasingly close to approving the proposed spot Bitcoin ETF by Grayscale Bitcoin Trust (GBTC), as the regulator asked for public comment on the ETF proposal. However, the SEC once again delays its decision on the spot ETF proposal, as the public has 21 days to submit comments on issues it had raised with the Grayscale spot ETF proposal. After that period, the regulator needs a further 14 days to respond to all of the comments, if any.

Nevertheless, The Gary Gensler-led SEC repeats all of its prior concerns with spot Bitcoin ETFs. Among the top issues with approving a spot Bitcoin ETF, the SEC denotes that the proposals may not be “designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”

Meanwhile, the true reason behind the postponement is still unknown, as the SEC already approved its first futures ETF back in October 2021. The financial watchdog pushed its decision for February 2022, despite Grayscale still being the largest crypto asset manager in the world, with $36.5 billion in assets under its management, 71% of which – in Bitcoin.

“The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice in addition to any other comments they may wish to submit about the proposed rule change.” the request for comments reads.

The SEC’s moves immediately sparked a wave of disapproval, with Jaret Seiberg, a managing director at Cowen Washington Research Group, stressing that the delay for comment does not mean it’s leaning in the direction of spot ETF approval.

“Instead, we see the SEC as using comments to protect itself in case Grayscale challenges a rejection in court,” Seiberg added.

Seiber’s opinion was echoed by former chairman of the Commodity Futures Trading Commission (CFTC), Timothy Massad, emphasizing on SEC Chair Gary Gensler being “very skeptical about what I will call cash ETFs,” adding that the commission “may just want to see what people say and get some input.”

Other financial experts are making the assumptions that a futures-based ETF is easier for approval, since its regulation is in CFTC’s jurisdiction, rather than spot ETFs, which are under SEC’s supervision.

Meanwhile, the United States started lagging behind countries like Canada, which already approved a Fidelity Investments spot Bitcoin ETF, after the U.S. SEC turned down Fidelity’s proposal for a U.S. spot ETF.

However, the ProShares futures Bitcoin ETF made $1 billion in total value of trading in just 24 hours since its launch, back in October 2021. The massive interest spike has put the ETF second to BlackRock Carbon ETF which traded $1.16 billion in shares value on the first day in terms of ETF debut.

The ProShares ETF showcased that investor interest in ETFs is huge, as most investment companies have no direct exposure to cryptos. If the SEC approves a spot Bitcoin ETF, the investor community may witness a perfect gateway for indirect Bitcoin exposure.

Bitcoin SEC bitcoin news cryptocurrency news crypto news SEC Security and Exchange Commission Grayscale

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