Aug. 15, 2023
Regarding the following: Ark 21Shares Bitcoin ETF, File No. SR-CboeBZX-2023-028 Invesco Galaxy Bitcoin ETF, File No. SR-CboeBZX-2023-038 iShares Bitcoin Trust, File No. SR-NASDAQ-2023-016 Valkyrie Bitcoin Fund, File No. SR-NASDAQ-2023-019 VanEck Bitcoin Trust, File No. SR-CboeBZX-2023-040 WisdomTree Bitcoin Trust, File No. SR-CboeBZX-2023-042 Wise Origin Bitcoin Trust, File No. SR-CboeBZX-2023-044 I wish to express strong support for approval by the Securities and Exchange Commission (Commission) of the seven proposed rule changes referenced above, which were filed pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and Rule 19b-4 thereunder to create a spot bitcoin exchange- traded fund (ETF). I encourage the Commission to approve the proposed rule changes, and I disagree with a recent letter from Grayscale Investments, LLC (Grayscale) suggesting that the Commission's approval of those rule changes would improperly grant an unfairly discriminatory and prejudicial first-mover advantage to these proposals. The Commission's previously-stated concerns with respect to market manipulation are well-addressed by the above-referenced applications. I disagree in the strongest terms with Grayscale's assertion that the Commission may hold up applications that meet the Commission's standards so that other market participants can catch up. The Rule 19b-4 application process is well-known and understood by market participants. Under the process for seeking exchanges rule changes, the Commission is required to provide responses and take action within specified time periods. Section 6(b)(5) of the Exchange Act provides the standards under which a rule change must be measured, and the Commission is required to consider whether an application meets those standards on the merits of the terms of the individual application. I recognize that Section 6(b)(5) requires, among other things, that the rules (including rule changes) of an exchange must not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers." The pending 19b-4 applications, if approved, would not discriminate between issuers – all issuers could revise their practices to comply with the rules, as amended. Section 6(b)(5) does not say that the prescribed time periods for granting of applications should be set aside to allow all market participants to have their pending proposals approved on the same timeline. Indeed, the Commission does not have the ability to pause its review of filed rule changes. The timeframe for the Commission's review and actions are specified in Section 19(b) of the Exchange Act. My view is that it would be a mistake, and likely a violation of the Exchange Act, to read other provisions of the Exchange Act and the Administrative Procedure Act to override the standards in Section 6(b)(5) and the time periods attendant to approvals of 19b-4 applications, in furtherance of preventing a theoretical first mover advantage. Not surprisingly, the Commission has not done such a thing in the past. The investing public deserves access to spot bitcoin ETFs that meet Commission standards. The Commission has previously expressed concerns around market manipulation with respect to the operation of spot bitcoin ETFs. An executed surveillance sharing agreement with Coinbase, Inc., in my view, adequately addresses those concerns. As such, we encourage timely approval of applications with executed surveillance sharing agreements.