Lawmakers in the United States have finally put their foot down and demanded that the US SEC Chairman approve Grayscale's spot Bitcoin ETF proposal "immediately."
US Congress Imposes Spot Bitcoin ETF Immediate Approval
A group of four members of the United States Congress sent a letter to the United States Securities and Exchange Commission (SEC) Chairman, Gary Gensler on Tuesday, September 26 demanding the prompt endorsement of spot Bitcoin ETFs.
The letter described major flaws in the US SEC's rejection of Grayscale's spot Bitcoin ETF proposal, stating that if the SEC is unable to provide an appropriate explanation for its different regulatory treatment of spot Bitcoin ETFs and Bitcoin Futures, then its rejection would be seen as an "unlawful" discrimination.
The letter was signed by prominent US lawmakers including Mike Flood, Ritchie Torres, Tom Emmer, and Wiley Nickel. The lawmakers stated that Congress is tasked to ensure the US SEC meets all investment product requirements created by Congress.
The members of Congress have also shown support for the initiation of Spot Bitcoin ETFs and stated that spot Bitcoin ETFs would ensure investors are properly safeguarded from investment risks since there would be better clarity on Bitcoin cryptocurrency.
"A regulated spot bitcoin ETP would provide increased protection for investors by making access to bitcoin safer and more transparent," the US lawmakers stated.
A hearing between the US SEC Chairman and the Congress is scheduled for Wednesday, September 27 and Gensler may be subjected to intense scrutiny and questions on his rejection of spot Bitcoin ETFs.
US SEC Delay ETF Approval Yet Again
The US SEC has continued to delay its approval for Grayscale's spot Bitcoin ETF application since August 2023, requesting more time to deliberate on evaluating its actions concerning the proposal.
Grayscale, a crypto asset management company applied to convert its Bitcoin trust to an ETF in October 2021. However, the US SEC denied the request, stating that the crypto asset investment firm's proposal did not meet anti-fraud and investor protection standards.
Grayscale responded by filing a court appeal in the District of Columbia requesting the court to review the US SEC's rejection of Grayscale's Bitcoin ETF application.
The digital asset management company scored an unprecedented victory against the US SEC after Judge Naomi Rao from the federal court of appeals ruled against the US SEC, stating that the commission's rejection of Grayscale's proposal was "arbitrary and capricious" because the regulator failed to explain its denial of spot Bitcoin ETFs after approving similar products like Bitcoin Futures in June 2023.
In light of the court's ruling, the crypto community and other prominent financial institutions like JP Morgan believe that the approval of spot Bitcoin ETFs is inevitable.
Presently the US SEC has delayed spot Bitcoin ETFs from several prominent crypto firms including Bitwise, BlackRock, WisdomTree, Invesco, Ark Invest, Galaxy, VanEck, and Fidelity.
The commission is yet to respond to the demands of Congress and the crypto community awaits more detailed information in the hearing on September 27.
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