The SEC lately met with Grayscale Investments to debate its bid to transform the Grayscale Bitcoin Belief (GBTC) right into a spot Bitcoin ETF.
In response to a memo printed by the SEC, the assembly passed off between Grayscale principals together with CEO Michael Sonnenshein and CFO Ed McGee, and officers from the SEC’s Division of Buying and selling and Markets. It involved “NYSE Arca, Inc.’s proposed rule change to checklist and commerce shares of the Grayscale Bitcoin Belief (BTC) below NYSE Arca Rule 8.201-E.”
In October 2023, the U.S. Court docket of Appeals issued an order for the SEC to evaluation Grayscale’s spot Bitcoin ETF utility, after the digital asset supervisor sued the regulator over its refusal to permit the conversion of GBTC right into a Bitcoin ETF. The agency argued that the SEC’s judgment was “arbitrary and capricious,” in mild of its acceptance of equally structured Bitcoin futures ETF merchandise— an evaluation with which the courtroom’s judges unanimously agreed in August.
On the time, the courtroom famous that the SEC lacked a coherent clarification for its refusal to approve the conversion. “The Fee didn’t adequately clarify why it authorized the itemizing of two bitcoin futures ETPs however not Grayscale’s proposed bitcoin ETP,” the courtroom opinion mentioned. “Within the absence of a coherent clarification, this not like regulatory remedy of like merchandise is illegal.”
Grayscale submitted an S-3 submitting with the SEC in October 2023, noting in a weblog submit that it was eligible to make use of the shorter submitting as a substitute of a type S-1 as a result of “its shares have been registered below the Securities Trade Act of 1934 since January 2020 and it meets the opposite necessities of the shape.” The asset supervisor additionally famous that it’s “able to function as an ETF” upon receipt of regulatory approvals together with NYSE Arca’s 19b-4 utility, an exemption or different type of Regulation M reduction and the S-3 type being declared efficient by the SEC.
Grayscale intends to checklist GBTC below the image GBTC on NYSE Arca, with the Financial institution of New York Mellon serving because the switch agent for shares within the belief.
The Bitcoin ETF race
So far, the SEC has rejected all functions for a spot Bitcoin ETF, although the race heated up earlier this yr when BlackRock, the world’s largest asset supervisor, filed an utility for a Bitcoin ETF. Earlier this month, an eight-day window during which the regulator might have authorized all pending spot ETF functions closed, with the SEC set to revisit them within the new yr.
Analysts from Bloomberg Intelligence and JP Morgan have estimated that the SEC will seemingly approve a spot Bitcoin ETF by early January.
