The U.S. Securities and Exchange Commission (SEC) is engaged in discussions with Grayscale Investments regarding the company’s application to convert its trust product, GBTC, into a spot Bitcoin Exchange Traded Product (ETF). This development carries significant implications for the cryptocurrency industry, with hopes that SEC approval will pave the way for broader access to digital assets for everyday investors.
According to the report, Grayscale has been in contact with both the SEC’s Division of Trading and Markets and the Division of Corporation Finance following its recent court victory. The court ruled that the SEC had acted “arbitrarily and capriciously” in rejecting Grayscale’s ETF application, instructing the regulator to reconsider its decision. This legal victory has reignited the application process, allowing Grayscale to press forward.
Craig Salm, Grayscale’s Chief Legal Officer, expressed their focus on engaging constructively with the SEC. However, the details of these interactions remain confidential. Salm noted that other applicants for Bitcoin ETFs, including financial giants like BlackRock and Fidelity, are progressing in their discussions with the SEC, indicating positive momentum in the industry.
SEC Chair Gary Gensler refrained from disclosing the agency’s next steps as it awaits staff recommendations. In the meantime, Gensler emphasized the importance of the SEC’s Corporation-Finance arm in managing “rapidly evolving technology and business models,” a department central to Grayscale’s application.
Potential Window for Bitcoin ETF Approvals
Bloomberg ETF analysts James Seyffart and Eric Balchunas highlighted a potential window of opportunity for the SEC to approve various spot Bitcoin ETF filings, including Grayscale’s GBTC conversion, in the days leading up to November 17. They noted that this window could result from the SEC extending the deadline for several pending ETF filings, with November 8 marking the last day for comments.
However, Seyffart emphasized that the approval of a spot Bitcoin ETF is not guaranteed. Still, he and Balchunas predict a 90% likelihood of approval by January 10 next year, highlighting the potential significance of this development for the cryptocurrency industry. The crypto community eagerly awaits further updates as these discussions progress. The SEC declined to comment on the ongoing negotiations.
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