Grayscale Wrote a Bitcoin ETF Letter to the SEC

Grayscale wrote a Bitcoin ETF letter to the SEC. Grayscale described the SEC's decisions as "arbitrary and capricious."

The SEC, which approved exchange-traded funds (ETFs) that track futures contracts for the first time in October, has a negative view on spot ETFs. The institution did not approve of VanEck's exchange-traded fund, which directly tracks the price of Bitcoin, in November. Grayscale, which is one of the companies that has taken important steps in the field of ETF and especially enables corporate companies to open up to Bitcoin and other cryptocurrencies, wrote a letter to the SEC about ETFs. As it is known, the Grayscale company offers the GBTC product to companies that consider investing directly in Bitcoin as a risk. The firm plans to convert GBTC to an ETF in the future. Grayscale sent a letter to the agency on Monday night, arguing that the SEC's repeated refusals could violate the Administrative Procedure Act (APA). In the US, the APA oversees the decision-making process of federal agencies. The statements in Grayscale's ETF letter to the SEC were as follows: “Bitcoin futures ETPs registered under the 1940 Act and spot Bitcoin ETPs that are not required or ineligible to be registered as such are the same in all respects. But according to the analysis in the November 12, 2021 refusal decision, the SEC treats them as if they were different. Although the Commission grounds on investor protection and treats the two ETFs differently, based on the 1940 law, this law does not mention, resolve, or address concerns such as market manipulation and fraud, which the commission states in each rejection decision. While it was stated in the letter that this stance of the SEC caused it to make arbitrary and capricious decisions, it was also pointed out that the pricing mechanisms of the Chicago Mercantile Exchange CME were sufficient to prevent manipulation in the futures market, but not enough for products that followed the spot market.

"It's not fair..."

Craig Salm, the legal manager of the company, who also wrote an article on Grayscale's website on the subject, also made harsh statements: “The Bitcoin ETF environment in its current form is both unfair and discriminatory. Holders of GBTC stocks and other US investors want to actively invest in Bitcoin. Fortunately, the APA exists to address such problems. In fact, it also functions to oversee the environment created by the federal agencies that enact and develop the regulations, and ultimately to protect the American investor.”