Fidelity Prepares to Launch Spot Bitcoin ETF In Canada, Grayscale Lashes Out At SEC

01. Dec 2021 Posted by Akolkar B on News

Fidelity Investments, one of the biggest asset managers, is preparing to launch a spot Bitcoin exchange-traded fund (ETF) in Canada. It seems that Fidelity is not willing to wait for the U.S. SEC to approve the long-awaited Bitcoin ETF and thus has chosen this overseas destination.

Unlike the Bitcoin Futures ETF, the spot Bitcoin ETF will allow users to buy and sell real Bitcoins instead of their derivative products. As pr Bloomberg’s senior ETF strategist Eric Balchunas said that the fund "Fidelity Advantage Bitcoin ETF” has been currently pending listing on a Canadian Exchange.

He further added that if the new fund succeeds, it would be the largest asset management company to offer Bitcoin services. Being one of the world’s largest asset managers, Fidelity has more than $4 trillion in assets under management. Besides, its decision to offer spot Bitcoin ETF shows its willingness to cater to the rising demand.

While the U.S. SEC has finally agreed to approve a Bitcoin futures ETF, the market isn’t quite happy about it. World’s largest digital asset manager Grayscale has recently lashed out at the SEC for rejecting more than a dozen spot Bitcoin ETF applications from the past.

In a letter to Secretary of the SEC Vanessa Countryman, Grayscale wrote that the securities regulator was wrong to deny the spot Bitcoin ETF application by VanEck. It particularly noted that SEC’s action could be in violation of a law that governs how federal agencies make their decisions.

In a letter by Davis Polk & Wardwell LLP, the law firm representing Grayscale, the digital asset manager noted that the SEC is doing favouritism by allowing the one and not the other. It added that the regulator is subjecting spot ETFs to “a different, vague and evidently impossible-to-meet standard.”

The letter mentions: “Doing so not only would be fundamentally unfair to BTC and its shareholders, but would violate the Section 6(b)(5) injunction against unfair discrimination among issuers, and constitute arbitrary and capricious administrative action in violation of the APA [Administrative Procedures Act]”.

Craig Salm, Grayscale’s Head of Legal further lashed out at the SEC for claiming that the spot Bitcoin ETFs are subject to manipulation. Currently, all the three approved Bitcoin Futures ETFs track Bitcoin futures contracts on CME. Similarly, the spot Bitcoin ETFs also seek to track CME’s indexes and would be at par with the futures contracts, says Grayscale.