SEC Opens Talks with Grayscale Investments on Bitcoin ETF Application

According to CoinDesk, the U.S. Securities and Exchange Commission (SEC) has initiated discussions with Grayscale Investments regarding the company's application to convert its trust product GBTC into a spot bitcoin exchange-traded product (ETF). This development could have significant implications for the crypto industry, as the approval of one or more ETF applications is eagerly anticipated by the sector. Such a milestone could facilitate everyday investors' entry into digital assets. Grayscale has been in contact with both the SEC's Division of Trading and Markets and the Division of Corporation Finance since winning its court battle, according to an anonymous source. Both SEC divisions would play a role in shaping and approving the firm's ETF application. Grayscale and CoinDesk are part of the same parent company, Digital Currency Group. The SEC had previously denied Grayscale's attempt to launch an ETF carrying direct crypto assets, leading to a U.S. federal court battle. The court ultimately ruled that the SEC's rejection was 'arbitrary and capricious' and ordered the agency to rescind its denial. This decision was finalized last month, putting the application back in front of the regulator. Craig Salm, Grayscale's chief legal officer, stated that the company is currently focused on constructively reengaging with Trading and Markets, though he did not elaborate on the details of the interaction. Salm also noted that other applicants for bitcoin ETFs, including financial giants BlackRock and Fidelity, appear to be making progress in their SEC talks. SEC spokespeople have not yet commented on the new discussions. SEC Chair Gary Gensler has not provided any indication of the agency's next steps regarding Grayscale's application and others while the commission awaits staff recommendations.