SEC Chairman Affirms Grayscale's Contribution to Bitcoin ETFs while FTX and Vanguard Face Resistance
Summary:
SEC Chairman, Gary Gensler, confirms that Grayscale's legal win over the SEC paved the way towards the approval of spot Bitcoin ETFs. Despite initial success, certain asset managers refuse to adopt the new ETFs. Meanwhile, following a boost in crypto prices, FTX creditors prefer to receive their repayment 'in-kind,' and some Vanguard users are reportedly considering closing their accounts after the firm denied the purchase of spot Bitcoin ETFs.
In a confirmation of an existing belief by many analysts, Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC), affirmed that Grayscale's legal triumph over the regulator established the basis for the forthcoming OK of spot Bitcoin exchange-traded funds (ETFs). Despite the successful introduction of spot ETF products, certain investment managers are refusing to participate; rumors suggest they are barring their clients from engaging with these freshly minted exchange-traded offerings.
Gary Gensler, SEC Chairman, acknowledged that Grayscale's August 2023 legal victory over the regulatory body was pivotal in sanctioning the go-ahead for ten spot Bitcoin ETFs. While featuring on CNBC's Squawk Box on January 12, Gensler stated that the court's judgement revolutionized the commissioner's attitude towards the Bitcoin proposals. “Over the years, we rejected many of these spot Bitcoin ETF applications. However, things changed," Gensler noted. "I have immense faith in the rule of law and respect for judicial rulings. Factoring in the latest court ruling, we progressed. This approach seems to be the most sustainable way forward."
Despite this, Gensler reaffirmed that the regulator does not vouch for Bitcoin. On August 29, 2023, the U.S. Court of Appeals Circuit's Judge Neomi Rao directed the SEC to dissolve its decision to dismiss Grayscale's GBTC listing application. However, as Cointelegraph noted during this period, the legal ruling didn't necessarily assure that Grayscale's spot ETF would get approved.
In light of the recent cryptocurrency bull run, FTX creditors are opting for 'in-kind' crypto repayments rather than 2022 low prices. FTX's intention to reimburse its clients in U.S. dollars, in alignment with the value of cryptocurrencies at the time of FTX’s bankruptcy filing in November 2022, has prompted creditors to call for an 'in-kind' compensation arrangement.
The bankruptcy of FTX has seen a considerable increase in the price of three major cryptocurrencies – Bitcoin (BTC), Ether (ETH), and Solana (SOL)– held by FTX custmers.
Vanguard, the asset management firm, appears to be facing threats from users to close their accounts after it decided to disallow acquisitions of spot Bitcoin ETFs. Vanguard declared on January 11, via a Wall Street Journal report, that its brokerage platform would not offer the newly released spot Bitcoin ETFs as these were not in sync with its traditional offerings.
"Spot Bitcoin ETFs will not be procurable on Vanguard’s platform," revealed the firm in a communication to the WSJ. "There are also no projections to include Vanguard bitcoin ETFs or any crypto-connected products."
"Our viewpoint is that these offerings do not match our portfolio that is concentrated on asset classes like bonds, equities, and cash. Vanguard deems these as the foundation of a balanced, long-term investment assortment."
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Published At
1/12/2024 9:58:08 PM
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