Grayscale CEO considers SEC's position on Bitcoin ETF incorrect
Michael Sonnenshein, CEO of cryptocurrency giant Grayscale Investments, said that the position taken by the SEC regarding cryptocurrency ETFs tied to Bitcoin futures is incompatible with previous comments from representatives of the department.
In early August, the current head of the SEC, Gary Gensler, suggested that soon the US Securities and Exchange Commission will be able to open access to the BTC-ETF, a tool that simplifies the acquisition of the main cryptocurrency on the market by investors. They will be able not only to implement it in a convenient form of shares but also to increase the overall liquidity of Bitcoins. At the Aspen summit, Gensler also noted that “he is particularly looking forward to the Bitcoin ETF pegged to futures traded on the CME”. In other words, the SEC can only open doors for ETFs that are pegged to the futures market in the form of synthetic contracts pegged to the future price, and not ETFs backed by bitcoins.
This clarification by the SEC chairman disappointed many members of the cryptocurrency community, who had been waiting for the green light for Bitcoin ETFs for years. The news turned out to be especially sad against the background of the fact that Canada and some European countries have already approved the first BTC-ETFs.
The CEO of Grayscale Investments said that this is nothing more than an attempt to "give their attention to the first child, completely forgetting about the second". Considering that the first application for a Bitcoin ETF from the Sonnenshein company was filed back in 2016, they have every reason to be unhappy with such actions of the American department.
Speaking about SEC policy, Sonnenshein recalled that in recent years, the regulator has approved more than a thousand ETFs that are not tied to the futures market, and their initial objections to BTC-ETFs due to possible manipulation of asset values under the influence of insiders are similarly applicable to ETFs tied to the futures market.
He also suggested that such a decision could be related to a 1940 US law providing greater investor protection opportunities than the earlier 1933 law governing stock market-linked ETFs. At the same time, it does not contain anything that could become an obstacle for the SEC in the adoption of the spot Bitcoin ETF from Grayscale. The protections mentioned in the law provide for an independent board of directors for the company, which of course Grayscale has. However, like any other firm whose shares are listed on the NYSE or NASDAQ.
The problem for the SEC, according to Sonnenshein, may be the cost of creating a BTC-ETF linked to futures, rather than creating a spot market that would be more expensive for consumers already. In addition, most individual investors are unlikely to dare to enter the derivatives market to buy Bitcoin futures ETFs. Such a decision of the department will simply scare them away.
Such restrictions by the US Securities and Exchange Commission may also have been influenced by concerns about the potential for the spot BTC-ETF to undermine the entire market. To avoid such a scenario, the SEC intends to force market participants to make "impressive margins for trading", which will weed out even more of those who wanted to enter the crypto ETF market.
Meanwhile, the commission has dozens of crypto ETFs “on the table” to consider, but it continues to put them off.
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