- The digital asset manager is sparing no resources to convert its Bitcoin Trust into a Bitcoin ETF
- Grayscale’s CEO said the firm would do whatever it takes to reach its goal, including litigating against the SEC
Pressure on the U.S. Securities and Exchange Commission (SEC) is mounting over approval of a spot cryptocurrency ETF.
The SEC has so far stuck to its stance, rejecting most spot Bitcoin ETF applications submitted by asset managers and other financial institutions. Recently, the agency denied proposals from Bitcoin-focused investment firm NYDIG and fund manager Global X.
In January, the agency led by Gary Gensler initially raised concerns about NYDIG’s spot Bitcoin ETF proposal before ultimately rejecting it this month. To date, the list of denied spot Bitcoin ETF filings includes applications from Kryptoin, WisdomTree, Fidelity, VanEck and First Trust.
Grayscale willing to pursue a legal battle
These rejections have not deterred Grayscale from expecting a favorable outcome. In an interview with Bloomberg on Monday, Grayscale CEO Michael Sonnenshein revealed that the digital asset investment manager is prepared to sue if its filing is denied.
Asked whether Grayscale would indeed go to court if its application were rejected, Sonnenshein confirmed it was a possibility.
“I think all options are on the table,” he said.
The decision on Grayscale’s application, filed in October, was pushed back last month — following an earlier delay in December — with a new deadline set for July 6.
During the interview, Sonnenshein said the firm has committed significant resources to support converting its flagship $30 billion investment vehicle into a Bitcoin ETF.
“The Grayscale team has put the full resources of our firm behind converting GBTC, our flagship fund, into an ETF,” he added. “It’s really important that investors know we will continue to support them.”
The proposed conversion has public backing
Earlier this month, the U.S. regulator published a document outlining the key issues that complicate the proposed conversion and invited public comment. Some of the exchange’s concerns included market manipulation, liquidity and transparency in the Bitcoin market, and fraud prevention practices.
“The Commission asks that commentators address the sufficiency of the exchange’s statements supporting the proposal, which are set forth in the notice, in addition to any other comments they wish to submit concerning the proposed rule change,” the notice stated.
The majority of public comments submitted were in favor of the proposed change.
Sonnenshein remains optimistic a spot Bitcoin ETF will come
Late last year, many industry observers predicted the first spot cryptocurrency ETF would arrive this year. With March nearly over, it is clear such an approval did not happen in the first quarter.
Nonetheless, Sonnenshein is confident the SEC will eventually approve a spot crypto ETF. The head of the digital asset investment firm and crypto asset manager said he believes it is a matter of when, not if.