US SEC Rejects Grayscale Spot Bitcoin ETF Approval

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Hyunjung] On the 29th (local time), the U.S. Securities and Exchange Commission (SEC) rejected Grayscale Investments' application for a spot Bitcoin exchange-traded fund (ETF).

According to Bloomberg News on the same day, the SEC stated that Grayscale failed to adequately address concerns regarding market manipulation and other issues.

The SEC has only approved Bitcoin futures ETFs. The market views this as based on the judgment that spot Bitcoin is traded at different prices across hundreds of exchanges worldwide, making it difficult to manage price manipulation. Bitcoin futures, on the other hand, are regulated by the Commodity Futures Trading Commission (CFTC).

Grayscale has been attempting since October last year to convert its $13.5 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

In particular, to resolve legal issues and prepare for the SEC's decision, Grayscale strengthened its legal team by recruiting Donald B. Verrilli Jr., who served as Solicitor General under the Obama administration. During discussions with regulators in May, Grayscale emphasized that converting to an ETF could grant investors up to $8 billion in value.

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