SkyBridge ‘disagrees in the strongest terms’ with Grayscale on bitcoin ETF approval timeline

Crypto firm SkyBridge urged the US Securities and Exchange Commission not to wait to approve the latest wave of spot bitcoin ETFs. This stance counters the viewpoint presented by Grayscale Investments just a month ago.

Grayscale sued the SEC last year for not allowing its Bitcoin Trust (GBTC) to convert to an ETF, and a decision in that suit is imminent. The firm noted in a July 27 letter to the SEC that approving some spot bitcoin ETF proposals before others would give those products an “unfairly discriminatory and prejudicial first-mover advantage.”

SkyBridge, an investment company led by former White House communications director Anthony Scaramucci, countered that premise in a Monday letter to the US securities regulator.

“SkyBridge disagrees in the strongest terms with Grayscale’s assertion that the commission may hold up applications that meet the commission’s standards so that other market participants can catch up,” wrote Rajib Chanda, a lawyer representing the firm.

SkyBridge previously sought to launch its own bitcoin ETF with First Trust Advisors — a fund ultimately denied by the SEC in January 2022. The firm was not among the latest wave of filers, which include Ark Invest and 21Shares, as well as a proposal by asset management giant BlackRock.  

Additional spot bitcoin ETF proposals SkyBridge mentions in the letter include ones by Valkyrie, VanEck, Fidelity, Invesco and WisdomTree.  

Nasdaq, the exchange on which BlackRock’s bitcoin ETF would trade, said in a July SEC filing that it “reached an agreement on terms with Coinbase” to enter into a surveillance-sharing agreement (SSA). The listing exchanges working with other fund groups on bitcoin ETF proposals, such as Cboe, added similar language to their own applications.

Read more: How ‘surveillance-sharing’ is designed to deter bitcoin ETF manipulation 

Grayscale said in its July letter that while it supports all progress made on the spot bitcoin ETF front, it does not believe the new SSAs should be “a silver bullet” to get such products approved. But SkyBridge argued the agreements address the SEC’s market manipulation concerns. 

“An executed surveillance sharing agreement with Coinbase, Inc., in SkyBridge’s view, adequately addresses those concerns,” Chanda wrote. “As such, we encourage timely approval of applications with executed surveillance sharing agreements.”

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