Why Is The SEC Rejecting Grayscale’s Spot Bitcoin ETF?
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The SEC rejected Grayscale Investments' proposal to convert its Bitcoin BTC futures ETF into a spot ETF. This sparked market panic and resulted in a 5% drop in Bitcoin price. Gary Gensler, SEC chairperson, reiterated that Bitcoin is the only digital asset he classified as a commodity. The regulation of a spot Bitcoin ETF may be contingent on the passage of the Responsible Financial Innovation Act (RFIA) by Wyoming Senator Cynthia Lummis, which seeks to clarify what digital currencies are (under US law), how they can be classified (commodities, ancillary assets, and securities), and how tax laws apply to them. This means that multiple regulatory agencies must collaborate in order to put in place a proper structure. Source