Are Crypto ETFs Finally Possible? Grayscale May Sue The SEC To Make It A RealityMarch 28, 2022 9:49 pm
Grayscale is the world’s largest digital asset manager which first filed proposals for a listing of a Bitcoin ETF back in April 2021.
So far, the SEC has continuously denied all submitted ETF proposals so far and has only approved future funds making it difficult for those looking to get exposure to the crypto market via traditional markets.
As the demand for crypto investments continues to increase by institutional clients, Grayscale has mentioned that it will use all tools at its disposal which includes seeking legal action against the SEC.
Grayscale has been pushing for an approval for almost a year so far and has been acting in the interest of its investors.
Continued pressure from large asset management firms like Grayscale may eventually speed up the approval process which many see as inevitable.
This is already evident as the SEC has recently been seeking public comment for this issue.
“all options are on the table,”
Grayscale CEO when asked if Grayscale would consider an Administrative Procedure Act lawsuit if their application to convert the Grayscale Bitcoin Trust (GBTC) into an ETF is denied.
– @Blockworks_ https://t.co/CMMtNt5jAG
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) March 28, 2022
The SEC is currently seeking public comment on whether to approve a bitcoin spot ETF. The regulator has given issuers, investors and other interested parties 240 days to submit input; the period closes in early July.
Grayscale has been encouraging investors to submit comments, even creating an education page and email form on its website.
“This is a really, really important part of the process,” Sonnenshein said.
“GBTC today is owned by investors in all 50 states, and there’s actually now over 800,000 accounts in the US all waiting patiently to have it converted into an ETF.”
The SEC has cited concern about market manipulation as the main hurdle to approving a spot product.
As mentioned, the period for investors and the public to submit input falls within a 240 day period and will close in early July.
Those who are interested should use this as the opportunity to apply as much pressure as possible against the SEC in order to make the approval of a Bitcoin ETF a reality.
Once a Bitcoin ETF gets approved and listed in all traditional exchanges, it may potentially setup the foundation for ETFs to be built for other prominent digital assets such as XRP and XLM.
Allowing for capital in well-establish financial markets to flow into the crypto world would likely accelerate the rate of adoption to a new level and creates new possibilities such as including it in 401(k) accounts or the portfolios of pension funds.
— Crypto Scoop (@cryptscp) March 28, 2022
Grayscale, Sonnenshein noted, is putting its “full resources” behind getting the applications approved by then.
In the interview, he emphasized the sheer size of the GBTC fund, citing its 800,000 accounts in the United States.
The Trust has traded since 2015, and Grayscale’s CEO argued that the Trust remaining as it is, rather than being converted into an ETF, puts investors at risk.
Since investors are unable to enjoy the protections afforded by the “ETF wrapper,” the SEC is not “doing everything [it] can to actually protect investors,” Sonnenshein argued.
Once this transition happens, there may come a day where crypto is considered a “safe asset” to be used in portfolio management instead of the risky reputation that it still has today by the mainstream.
💥 Grayscale may sue the SEC if their Bitcoin ETF Conversion is rejected pic.twitter.com/mVnmBvJRhA
— Crypto Tea (@CryptoTea_) March 28, 2022
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