SEC shunning Bitcoin opportunity with spot ETF denial: Grayscale CEO
The SEC said that Grayscale's application failed to answer questions surrounding concerns about market manipulation
The SEC is shunning Bitcoin opportunity: Grayscale CEO
Grayscale CEO Michael Sonnenshein reacts to the SEC denying Grayscale's request to create a spot Bitcoin ETF on 'Making Money with Charles Payne.'
Grayscale Investments CEO Michael Sonnenshein has weighed in on the U.S. Securities and Exchange Commission's decision to deny the firm's bid to turn the world's largest Bitcoin fund into an exchange-traded-fund.
In its decision, the SEC stated that the firm's application seeking to turn the Grayscale Bitcoin Trust into a spot Bitcoin ETF failed to answer the agency's questions surrounding concerns about market manipulation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GBTC | GRAYSCALE BITCOIN TRUST ETF - USD ACC | 76.03 | -1.06 | -1.38% |
"We were merely asking the SEC to bring this closer into the regulatory perimeter, give additional protections, give additional disclosure and the SEC is kind of shunning the opportunity to do that for investors," Grayscale CEO Michael Sonnenshein told FOX Business' Making Money with Charles Payne on Tuesday. "Investors want this, investors deserve this and they’re a disclosure regulator. If the disclosures are out there and the risks are outlined, investors should be free to invest in anything that they want."
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Michael Sonnenshein, chief executive officer of Grayscale Investments LLC, speaks during an interview at the Greenwich Economic Forum in Greenwich, Connecticut, on Tuesday, Sept. 21, 2021. (Jeenah Moon/Bloomberg via Getty Images / Getty Images)
Following the SEC's decision, Grayscale filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit. Grayscale’s senior legal strategist Donald B. Verrilli Jr., a former U.S. solicitor general, and a team of attorneys at law firm Davis Polk & Wardwell are spearheading the company's defense.
"We were prepared for any and all scenarios no matter which way the SEC ruled here," Sonneshein noted.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BITO | PROSHARES BITCOIN STRATEGY ETF - USD DIS | 25.99 | +1.59 | +6.52% |
| GCC | WISDOMTREE TRUST ENHANCED COMMODITY STRATEGY | 18.81 | -0.03 | -0.16% |
| BITQ | BITWISE CRYPTO INDUSTRY INNOVATORS ETF - USD DIS | 20.70 | +1.60 | +8.38% |
While the agency has repeatedly denied spot Bitcoin ETFs, including from Fidelity and VanEck, it has given the green light to ETFs that offer exposure to Bitcoin but are not pure plays, such as the ProShares Bitcoin Strategy ETF, WisdomTree’s Enhanced Commodity Strategy Fund and the Bitwise Crypto Industry Innovators ETF.
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The SEC's latest decision of spot Bitcoin ETFs comes as chairman Gary Gensler has previously referred to cryptocurrencies as the "Wild West" and has called on Congress to take regulatory action.
In March, President Biden signed an executive order directing agencies within his administration to study whether the U.S. central bank should create a digital currency. In addition, Sen. Cynthia Lummis, R- Wyo., and Sen. Kirsten Gillibrand, D-NY, have introduced a bill to create a regulatory framework for cryptocurrencies.
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Sonneshein believes that increased cryptocurrency regulation would give it "more staying power" and "increase the validity of the asset class."
"I do think the state of crypto in DC is at a place that its never been before," he added. "The amount of engagement, the amount of attention and the willingness to engage on these issues is really important and we’re seeing countries around the world continuing to adopt crypto and crypto-focused regulation because they don’t want to squander innovation. They want to create job growth and they want to make sure that they stay competitive from a technological perspective."
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Sonneshein's comments come as the price of Bitcoin has nosedived since hitting an all-time high of $68,990.90 per coin hit last year.
As of the time of publication Saturday, the world's largest crytpocurrency is trading above $21,000 per coin. In June, Bitcoin briefly hit a 52-week low of $17,601.58 per coin.
The total market capitalization of the global crypto market has fallen below $1 trillion, off its 2021 high of approximately $2.8 trillion, according to CoinMarketCap.
"If you’re in crypto, you know that it comes with volatility. The asset class has seen these types of drawdowns of significant size many times before," Sonneshein says. "Every time our industry gets challenged, we learn lessons, we get stronger and we continue building and moving ahead and I think this time is no different."