The U.S. Securities and Exchange Commission (SEC) is in discussions with Grayscale Investments regarding the specifics of the company’s request to transform its trust product GBTC into a spot bitcoin exchange-traded product (ETF), as per an individual familiar with the ongoing di...
The outcome of these talks could have significant implications for the cryptocurrency industry.
Both divisions of the SEC will play a crucial role in shaping and approving Grayscale’s ETF application.
While Grayscale has had an ongoing relationship with the SEC through its existing Grayscale Bitcoin Trust (GBTC), the agency previously denied its attempt to launch an ETF directly tied to crypto assets. This led to a federal court battle, concluding with the court finding the SEC’s rejection as “arbitrary and capricious” and ordering the agency to rescind its denial.
The court’s decision was finalized last month, returning the application to the regulatory spotlight.
While SEC Chair Gary Gensler declined to comment on the ongoing discussions, he previously mentioned that the commission is awaiting staff recommendations before deciding on the next steps for Grayscale’s application and others, according to The Block.
In the meantime, Gensler highlighted the significance of the agency’s corporation-finance arm in dealing with the challenges posed by “rapidly evolving technology and business models,” a central aspect of Grayscale’s ETF application.