Grayscale Urges SEC: Approve All BTC ETFs At Once

Check out the biggest breaking crypto market updates for today: 

Bankrupt Crypto Platforms FTX, Genesis Set To Resolve Dispute

Bankrupt crypto companies FTX Trading Ltd. and Genesis Global Holdco LLC have reportedly reached an in-principle agreement to settle a dispute surrounding their bankruptcy protection cases. Details about the settlement have not been revealed. 

A letter filed by the firms’ legal representatives reads, 

“The Parties have reached an agreement in principle, subject to documentation, regarding a settlement that would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.” 

Genesis had emerged as the largest unsecured creditor of FTX and its affiliated companies, with $226.3 million owed, according to a January court filing that includes a list of major creditors. In parallel, FTX also claimed that Genesis owed nearly $4 billion, later reduced to $2 billion, which Genesis has denied. 

Genesis Global Capital, the lending division of Genesis, temporarily halted redemptions and new loans in the wake of the collapse of FTX in November. This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion, a spokesperson said at the time. The company then filed for bankruptcy protection in January, already weakened because of losses to the tune of several hundred million due to the collapse of Three Arrows Capital. 

Genesis is owned by Digital Currency Group (DCG), which also owns CoinDesk.

Securitize Launches Tokenized Security In Europe

Digital asset trading platform Securitize has reportedly issued its first tokenized equities under the European Union’s pilot regime for digital assets. Securitize’s first offering is issued via the Avalanche blockchain and represents equity in the Spanish real estate investment trust Mancipi Partners. Secondary trading for the assets is set to begin in September. 

Carlos Domingo, the co-founder of Securitize, stated, 

“Securitize is now the first firm to be able to issue and trade tokenized securities in both the U.S. and Europe, and is the first firm to do so under the EU’s new pilot regime for digital assets. European businesses will be a major beneficiary of this innovation, giving businesses a new way to raise capital through primary capital raises, and obtain potential tax benefits and liquidity through secondary trading.” 

In May, Securitize partnered with the asset manager Hamilton Lane to bolster investor exposure to tokenized security offerings.

Grayscale Urges SEC To Approve All Bitcoin ETFs Simultaneously

In a letter addressed to the U.S. Securities and Exchange Commisssion (SEC), crypto fund manager Grayscale urged the authority to approve all proposed spot BTC ETFs at the same time in order to avoid any one having an advantage over the others. 

It argued that the SEC shouldn’t pick “winners and losers” and instead make a fair and orderly decision. Grayscale also criticized the recent surveillance sharing agreements (SSAs) between Coinbase and the other spot ETF providers by stating that they would not meet the SEC’s standards. 

ETF filings from Invesco, BlackRock, Valkyrie, VanEck, Wisdom, Fidelity and Ark Invest were recently updated to include SSAs with Coinbase. 

Coinbase would share information on its trading books and other information so the SEC can monitor any possible market manipulation or irregular trading activity. 

In late June, the SEC pushed back on the ETFs due to there being no SSAs, saying they were needed due to what it claimed was the potential for crypto markets to be manipulated. 

Grayscale claimed, however, that the SSA’s “would neither satisfy or be necessary” under the SEC’s standards, as Coinbase isn’t registered with the SEC as a securities exchange or broker-dealer nor with teCommodity Futures Trading Commission as a futures exchange. 

It added approving the ETFs would be “a positive but sudden and significant change” in the SEC’s application of its standard and would “improperly grant an unfairly discriminatory and prejudicial first-mover advantage to these proposals.” 

The Grayscale Bitcoin Trust (GBTC), which aims to track Bitcoin’s price, has nearly 1 million investors, Salm claimed. 

He said if it’s converted to an ETF, it would return billions in value to investors, adding there’s “simply no reason” the SEC should keep GBTC investors from a spot Bitcoin ETF. 

The SEC denied Grayscale’s application to convert the GBTC to a spot Bitcoin ETF last June. 

In response, Grayscale sued the regulator, saying it was acting arbitrarily by failing to apply consistent treatment to similar investment vehicles.

Luke Baldwin