SEC Requests Comments on Concerns About Grayscale's Spot Bitcoin ETF Proposal

The agency’s issues include possible share manipulation and the liquidity of bitcoin markets.

AccessTimeIconFeb 4, 2022 at 9:11 p.m. UTC
Updated May 11, 2023 at 6:03 p.m. UTC

The U.S. Securities and Exchange Commission (SEC) has expressed concerns about how Grayscale will head off share manipulation, fraud and other possible issues in its proposal to convert its Grayscale Bitcoin Trust (GBTC) into a bitcoin spot exchange-traded fund (ETF), according to a notice Friday.

  • The regulator also flagged its concerns about the liquidity and transparency of bitcoin markets, as well as the “suitability” of bitcoin as the underlying asset for the fund. Grayscale is a unit of Digital Currency Group, which is also the parent of CoinDesk.
  • The SEC has asked the public to comment on these issues, and given them 21 days to do so, with an additional 14 days for responses to those comments.
  • Earlier this week, the SEC requested investment manager Bitwise to respond to similar concerns about its own spot bitcoin ETF proposal.
  • Grayscale initially filed an application with the SEC to convert its Grayscale Bitcoin Trust into a bitcoin spot ETF in October. In December, the SEC pushed off its review of Grayscale's application by 45 days.
  • Over the past couple of months, the agency has rejected spot bitcoin ETF applications from WisdomTree, Krypton, SkyBridge and Fidelity. It is weighing a number of other applications from investment firms.

CORRECTION (Feb. 4, 2022, 22:00 UTC): Corrects bullet point on comment and rebuttal periods for the public.

CORRECTION (Feb. 4, 2022, 22:12 UTC): Corrects bullet point to state that the SEC's concerns are about the liquidity and transparency of Bitcoin markets.

UPDATE (Feb. 4, 2022, 22:32 UTC): Updated with additional detail throughout.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Author placeholder image

Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about