Bitwise, a crypto index fund, and Grayscale, which manages the bitcoin trust GBTC, filed with the SEC late last year to convert their funds into spot bitcoin ETFs, but after several delays, the SEC formally rejected both companies’ applications in late June.
Citing concerns about market manipulation, lack of oversight sharing agreements between large regulated markets and regulated exchanges…
Wait for a reason.
According to a Coindesk report earlier today, Bitwise Chief of Compliance Katherine Dowling said the company has been in active dialogue with regulators and is considering filing a complaint with the SEC to understand why the regulator rejected Bitwise’s spot ETF application.
“This type of lawsuit is really seeking answers about technical questions…
I think it’s more productive if you can have a conversation and figure out what the barriers are and answer those questions together in a productive way.”
But Dowling, who spent more than a decade as a federal prosecutor in the U.S. Attorney’s office, also said she believes litigation is never the most effective approach.
Grayscale has already filed a formal complaint against the SEC, and Michael Sonnenshein, the chief executive of Grayscale, who also failed, went ahead and tweeted on June 30 that he had filed a formal complaint with the SEC.
Grayscale supports and believes in the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and promote capital formation — we are deeply disappointed and strongly disagree with the SEC’s decision to continue denying physical Bitcoin ETFs access to U.S. markets, he said in an earlier statement.
We believe U.S. investors overwhelmingly want to see GBTC convert to a spot Bitcoin ETF, which would unlock billions of dollars in investor capital while bringing the world’s largest Bitcoin fund further within U.S. regulatory reach.
Former Deputy Attorney General Donald B. Verilli,Jr., who took over as Gray’s senior legal strategist this month, also said in a statement that the SEC’s failure to apply consistent treatment to similar investment vehicles “willfully and caprently violated the Administrative Procedures Act of 1934 and the Securities Exchange Act…
We look forward to resolving this issue in a productive and expeditious manner.
Separately, Reuters reported today that the U.S. Securities and Exchange Commission has postponed its decision on a spot Bitcoin ETF jointly launched by Ark Invest and issuer 21Shares until August 30.
Ark Invest, in partnership with 21Shares, initially applied to the SEC in June 2021 to list a spot Bitcoin ETF on the CBOEBZX exchange, but it was rejected in April;
ARK Invest then filed another application with the SEC in mid-May. Regardless of whether Ark Invest approves or not, the SEC is expected to make a decision by January 24, 2023 at the latest.