The United States Securities and Exchange Commission (U.S. SEC) has postponed a decision on Grayscale’s application for a Bitcoin ETF or exchange-traded fund yet again, expressing concern about market manipulation, liquidity, and transparency.
The SEC voiced concerns about how the digital asset manager proposes to transform its Grayscale Bitcoin Trust (GBTC) into a spot ETF in a notice published Friday afternoon. Grayscale’s approach, in particular, did not satisfy the regulator that it was aimed to prevent alleged fraud and intentional influence in the Bitcoin market. The SEC has asked the public to give input on these issues and has given interested parties 21 days to submit written responses.
The SEC has just delayed their decision on whether GBTC can convert to a bitcoin ETF.
— Pomp 🌪 (@APompliano) February 4, 2022
Grayscale’s initial application to convert shares of GBTC into a spot Bitcoin ETF was submitted to the SEC in October, according to Cointelegraph. The securities regulator said less than two months later that it was deferring its decision on Grayscale’s application and a similar one put forward by Bitwise.
As of February 5, Grayscale is the world’s largest digital asset manager, with over $36.5 billion in assets under management. The GBTC product accounts for more than 71% of the company’s total assets.
02/04/22 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
Total AUM: $36.5 billion$BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $ADA $SOL $AMP pic.twitter.com/1IqNGLX3QP
— Grayscale (@Grayscale) February 4, 2022
The tough stance of SEC on Bitcoin ETF approval
While the SEC has been reluctant to approve a spot Bitcoin ETF, a futures-linked product has received far more favorable treatment. It recently rejected the Fidelity Investments’ spot BTC ETF which now is aiming to launch the product in Canada. However, ProShares Bitcoin Strategy ETF was approved as the first Bitcoin futures fund in the United States in October. The SEC approved a pair of Bitcoin-linked Strategy ETFs from Valkyrie and VanEck shortly after.
The tough instance of the regulator on companies bringing their ideas has already resulted in several rejections since the start. Recently, the SEC commissioner talked about the BTC ETF delays and possible reasons behind this.