The former Chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, suggested that institutions applying for a spot Bitcoin ETF today looked to be closer to receiving the regulator’s approval.   

In an interview with CNBC on Monday, Clayton explained that the SEC’s previous decisions to turn down a spot Bitcoin ETF but approve a futures Bitcoin ETF was centered around the appropriate surveillance measures and market manipulation controls that existed within the futures market.

“I think what the institutions are arguing is that those distinctions have gone away, and now the spot product is actually less drag, more efficient for the investor,” said Clayton.

“If they’re right, if you can demonstrate that the spot market has similar efficacy to the futures market, it would be hard to resist approving a Bitcoin ETF,” he added.

Meanwhile, crypto asset manager Grayscale has called out the SEC for approving a leveraged bitcoin-based ETF, despite rejecting its request to convert its flagship Bitcoin fund GBTC into a spot Bitcoin ETF.

In a letter to the U.S. Court of Appeals for the District of Columbia Circuit, Grayscale’s lawyers argued that the leveraged Bitcoin ETF is far riskier than a spot Bitcoin ETF and further reinforces the firm’s legal case against the SEC.

The race to offer the first spot Bitcoin ETF now has seven institutional contenders, including the world’s largest asset manager BlackRock which filed to offer the product last month and triggered a wave of new applications.

(In an episode of Unchained, Bloomberg Intelligence ETF watcher James Seyffart explained why he believes BlackRock could win the Bitcoin ETF race, and why he believes the firm “knows something” about the SEC’s enforcement actions against crypto exchanges.)