Patrick Daugherty Comments on SEC Pause of Grayscale Crypto ETF

Foley & Lardner LLP partner Patrick Daugherty assessed the U.S. Securities and Exchange Commission’s decision to pause the release of a crypto exchange-traded fund in the Bloomberg Law article, “Grayscale Stymied on New Crypto ETF Even as SEC Backs Industry.”

“In the past, people were willing to go along with the staff and the commission as it dragged out the proceedings for new crypto [exchange-traded products],” commented Daugherty, who chairs Foley’s Blockchain & Digital Assets team. “My view is that was the past and this is now, and I think it should change.”

“The crypto bar is big enough and proficient enough that there are many competent lawyers who will be able to apply that guidance speedily, without waiting for it to soak in, the way that might have been required years ago,” he continued. “I wouldn’t think it’s a reason to stall progress on this fund.”

Daugherty noted it would be a significant step if the SEC approves an index with the specific digital asset basket proposed by Grayscale and others, given prior regulatory scrutiny.

“It is a commission preference to approve several similar products all at once, so that no one sponsor can steal a march on the market and establish dominant market share ahead of others,” he added. “So that could be what’s going on here.”