Eight months after Grayscale Investments initiated a lawsuit towards the US Securities and Trade Fee (SEC) over rejecting its utility for a spot Bitcoin (BTC) exchange-traded fund (ETF), the corporate’s CEO has commented on the regulator’s reasoning.
Certainly, Michael Sonnenshein, the CEO of the world’s largest cryptocurrency administration agency, mentioned that the principle motive for the SEC nonetheless delaying the approval of a spot Bitcoin ETF was the perceived lack of ability to totally regulate the underlying Bitcoin spot market, as he advised CNBC’s ‘Squawk Box’ in an interview revealed on March 8.
As he defined:
“They say there is not enough of the ability to detect fraud and manipulation in the underlying Bitcoin spot market.”
Quashing the regulator’s arguments
Nonetheless, in accordance with Sonnenshein, the company’s arguments towards the conversion of Grayscale Bitcoin Belief (GBTC) right into a spot Bitcoin ETF maintain no weight as a result of the spot and futures markets are inevitably correlated and the futures crypto ETFs have already been accepted by the regulator:
“At its core, the bedrock of this case is that the SEC has approved Bitcoin futures ETFs and continues to deny spot ETFs like GBTC. (…) But the Bitcoin futures market is a derivative of the spot market, so these are two markets that are inextricably tied. They have a 99.9% correlation, and so the actions of the SEC here are really arbitrary and capricious.”
That mentioned, Grayscale’s boss believes that the case towards the monetary watchdog goes effectively, as he defined that the group had “walked away very encouraged” from the oral arguments introduced on the day earlier than and that “it’s never been clearer – investors want access to Bitcoin through an ETF wrapper.”
Moreover, he argued that there isn’t a want for extra regulation on this explicit difficulty, because the Grayscale Bitcoin Belief “has been out there for nine years (…), publicly traded since 2015, SEC-reporting since 2020,” and “there is no new legislation required to bring GBTC further into the regulatory perimeter.”
In conclusion, Sonnenshein has expressed his opinion that the SEC ought to give attention to doing “what it is supposed to do, which is protect the investors, and bringing [Bitcoin] into an ETF wrapper would further protect the investors.”
As a reminder, Grayscale has been working to develop the world’s greatest funding car for Bitcoin since 2013. In June 2022, Brokers reported that its authorized group had filed a petition for evaluation difficult the SEC’s determination to reject the agency’s spot Bitcoin ETF utility.
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