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The
SEC had said Grayscale's proposal to list the ETF did not meet
the standard designed to prevent fraudulent practices and
protect investors. (https://bit.ly/3yw4Nko)
"If regulators are comfortable with ETFs that hold derivatives
of a given asset, they should logically be comfortable with ETFs
that hold that same asset," Grayscale said, referring to the
SEC's approval of ETFs based on bitcoin futures.
Grayscale, one of the world's biggest digital asset managers,
had proposed creating the ETF as a conversion of its Grayscale
Bitcoin Trust [GBTC.PK]. It was seeking to get the ETF listed on
NYSE Arca, which is owned by Intercontinental Exchange Inc.
In rejecting more than a dozen proposals for spot bitcoin ETFs
over the past year, the SEC has focused on a lack of
surveillance-sharing agreements with a regulated market of
significant size relating to the underlying assets.
Issuers of spot bitcoin ETFs rejected by the SEC in recent
months include Fidelity, SkyBridge and Valkyrie, all of which
sought to provide easy exposure to the digital currency.
The SEC's rejection of Grayscale's application did not rest on
"an assessment of whether bitcoin, or blockchain technology more
generally, has utility or value as an innovation or an
investment," the regulator said.
The price of bitcoin, the largest digital currency, has plunged
more than 70% from its high of around $69,000 in November.
Other cryptocurrencies and crypto-related stocks have also
declined in recent months as investors dumped riskier assets in
response to high inflation and policy tightening by major
central banks.
(Reporting by Akriti Sharma in Bengaluru and John McCrank in New
York; Additional reporting by Niket Nishant; Editing by Leslie
Adler, Bradley Perrett and Devika Syamnath)
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