GBTC & The SEC Lawsuit with James Seyffart

 
 

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“The judges might issue a ruling that says, “You violated the APA. You did not treat situations alike.” And then say, “Go back to the drawing board.” And then the SEC could then just deny for other reasons... So Grayscale might win the case and then still not be able to convert to an ETF.”
— James Seyffart

SHOW DESCRIPTION

James Seyffart is an analyst for Bloomberg Intelligence covering ETFs. In this interview, we discuss the how and why of ETFs, Grayscale’s legal battle with the SEC over the approval of a Bitcoin ETF, and the complexities of Grayscale implementing a redemption program for GBTC. We also talk about the role of the SEC in regulating Bitcoin and Gary Gensler’s political ambitions.

- - - - 

In two months' time, it will be the 10-year anniversary of the Winklevoss Twins making the first submission to the SEC for a Bitcoin spot ETF. When the SEC rejected this in 2017, it seemed as though it was a temporary blip, and that a US Bitcoin spot ETF would inevitably be approved. And yet, the SEC has rejected a raft of subsequent applications, and many more sit in Gary Gensler’s inbox awaiting a decision. 

Grayscale has decided to test the SEC's stance in court. Whilst there are various opinions as to the underlying motivation for Grayscale taking on this case, there is no doubt that this is the best test of the SEC's current intransigence in relation to a Bitcoin spot ETF. 

Bloomberg Intelligence’s James Seyffart, an ETF expert, provides his informed opinion on the current status of Grayscale’s case, the likelihood of the SEC losing the case, and whether this will affect the SEC's position of a Bitcoin spot ETF. He also sets out why the SEC is so reluctant to approve what many in the community believe would open up Bitcoin to a new massive wave of adoption.

TIMESTAMPS

00:01:38: Introductions
00:03:30: James' role at Bloomberg
00:08:37: Rules around redemptions and subscriptions, and Reg M
00:12:37: Pros and cons of a Bitcoin ETF, and EFTs explained
00:31:49: GBTC history, and ETHE
00:42:19: Why Grayscale might not want an ETF
00:45:16: Grayscale vs the SEC, and Gary Gensler's motivation
00:57:19: Possible outcomes of the lawsuit
00:59:56: 1933 Act vs 1940 Act
01:04:12: Importance of being first to market, and an overregulated market
01:09:46: Discovering Bitcoin through mining, and Bloomberg's reporting
01:13:29: Final comments

 

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SHOW NOTES

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