CoinDesk reported, citing sources familiar with the matter, that the U.S. Securities and Exchange Commission (SEC) has begun detailed discussions with asset management firm Grayscale regarding its application to convert its trust product GBTC into a spot Bitcoin ETF.
Grayscale’s Bitcoin Trust Fund (GBTC) has been seeking to transition into a spot ETF to address long-standing issues of negative premiums, but has not received proactive handling from the SEC. The company even went as far as to litigate against the SEC. In August of this year, a judge deemed the SEC’s denial of the application as “arbitrary and capricious” and ordered the agency to rescind its decision and reconsider Grayscale’s submission.
Sources revealed that since winning the legal battle, Grayscale has been in contact with the SEC’s “Trading and Markets Division” and “Corporate Finance Division.” These two SEC divisions will play a role in shaping and approving the company’s ETF application.
Grayscale’s General Counsel Craig Salm stated that the company is currently engaging in constructive dialogue with the SEC’s Trading and Markets Division. While Salm did not disclose further details of the discussions, he noted that other Bitcoin ETF applicants, including financial giants BlackRock and Fidelity, are also making similar negotiating progress with the SEC.
To date, the SEC has not publicly commented on the progress of reviewing spot Bitcoin ETFs. When asked two weeks ago about how the SEC will proceed with Grayscale’s application and other ETF applications, SEC Chairman Gary Gensler only mentioned that they will wait for recommendations and evaluations from their staff before providing further responses to Grayscale’s application and other related applications.