Will Beck, head of digital assets at WisdomTree, an exchange-traded fund (ETF) provider, said US regulators will “ultimately succeed” in approving a tool for spot investment in Bitcoin, but dealing with allegations of market manipulation could prove challenging.
Speaking to Cointelegraph at the Converge22 conference in San Francisco on September 29, Peck said that WisdomTree will not pursue Grayscale in a lawsuit against the US Securities and Exchange Commission over its application for a Bitcoin (BTC) ETF. Beck said the company plans to “deal more productively” with the SEC without litigation, but that it may take some time to resolve some of the regulator’s reasons for rejecting Bitcoin ETF applications.
“We all look at it and see what happens,” Beck said. “The reasons given by the [SEC] were really the possibility of market manipulation — that bitcoin is not traded on regulated sites […] There have been some questions in the past about custody, the capacity of qualified custodians, and whether or otherwise banks can dispose of of crypto assets on behalf of a registered company like this.”
“It seems to me that the first round of market manipulation is the hardest to break, since there was the biggest drop.”
Beck said the company will continue to communicate with US regulators about the ETF offering. WisdomTree has several exchange products related to various cryptocurrencies in Europe and has submitted more than one application to the SEC for a US spot Bitcoin ETF offer. One of the company’s filings was rejected by the Securities and Exchange Commission (SEC) in December 2021, after which WisdomTree changed its filing to indicate that a US bank is the custodian of the cryptocurrency of its bitcoin trust.
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While Grayscale’s legal action against the SEC over the ETF’s proposal continues, the company’s general counsel, Craig Salem, has indicated that a decision could take one to two years. The US regulator first began approving investment vehicles related to BTC derivatives in October 2021, but has rejected applications for Bitcoin ETFs from 16 companies, often stating that the investment vehicles “were not intended to prevent activities fraudulent and manipulative practices. “