Coinbase is optimistic that the Securities and Exchange Commission will sign off on a U.S. bitcoin exchange-traded fund, commented Paul Grewal, the company's chief legal officer, to CNBC. Although he didn't give an estimation of when the approval could occur, Grewal noted that the SEC will have the ultimate say. He went on to assert that the SEC is likely to agree to a bitcoin ETF soon, emphasizing that the regulator has been unsuccessful in stopping Grayscale from changing its GBTC bitcoin fund into an ETF.
Coinbase's chief legal officer, Paul Grewal, expressed his optimism in an interview with CNBC's Arjun Kharpal that a bitcoin exchange-traded fund will be approved by the U.S. Securities and Exchange Commission. Grewal suggested that these ETFs should be green-lit due to the law. Last week, the SEC failed to challenge a legal ruling that barred the regulator from rejecting the crypto-focused asset manager Grayscale's bid to turn its huge GBTC bitcoin fund into an ETF, which is likely to pave the path for the approval of a bitcoin-related ETF in the near future. He noted that the entities that have presented these proposals are some of the most prominent financial services companies, which suggests that progress will be made soon; however, Grewal acknowledged that the ultimate decision rests with the SEC.
I am certain that the SEC will fulfill its duties after the U.S. Court of Appeals made it clear that the SEC cannot reject these applications in an arbitrary or capricious manner. A bitcoin ETF provides investors an opportunity to acquire bitcoin without having to make a direct purchase from an exchange, which could be attractive to retail investors who wish to gain exposure to bitcoin without actually owning the asset itself. Coinbase is likely to reap the rewards of a approved bitcoin ETF as it is seen as a common equity held in portfolios that give investors crypto exposure. Despite the lawsuit from New York's attorney general alleging that Digital Currency Group, Gemini and DCG's subsidiary Genesis fraudulently deceived investors of over $1 billion, Grewal expressed a positive outlook on other potential bitcoin ETFs being authorized soon. He stated that the SEC will abide by the law and impartiality when judging the applications that are pending.
Bitcoin has made a fairly substantial comeback in the year to date, climbing 72%. A range of factors have contributed to this, such as the market reaction to the Federal Reserve's recent policy decisions, and the upcoming halving event which will reduce the reward offered to miners. On the other hand, decreased retail investor interest has been an issue, in part due to the financial struggles of once-powerful industry players like FTX, BlockFi and Three Arrows Capital.FTX, in particular, met a rather unfortunate end in 2021 when allegations of multibillion-dollar fraud arose and founder Sam Bankman-Fried was tried for the crime. He pleaded not guilty. Nevertheless, Grewal believes that these circumstances herald a turning point, and that investor and consumer interest in crypto is likely to pick back up soon due to impending regulatory action and similar developments.
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