BTC
by BSCN
September 6, 2023
Grayscale argues that its spot Bitcoin ETF should be treated similarly to approved Bitcoin futures ETFs.
Summary
In the wake of a favorable court ruling against the U.S. Securities and Exchange Commission (SEC), Grayscale Investments has fervently called upon the regulator to expedite the approval of its proposed exchange-traded fund (ETF) designed to track Bitcoin's performance.
Last week, the District of Columbia Court of Appeals in Washington, represented by a three-judge panel ruled that the SEC erred in rejecting Grayscale's bitcoin ETF application without providing a clear rationale. This verdict, closely monitored by the industry, briefly sent Bitcoin's value soaring by almost 7%.
While the SEC retains the option to challenge this ruling, it is presently reviewing Grayscale's application, as stated by the agency. In response, Grayscale's legal representation, DavisPolk, submitted a letter to the SEC on Tuesday, arguing, "We hope you will agree that the best use of resources now is for the (SEC) to issue an order approving" the product.
The proposed spot Bitcoin ETF, if approved, would provide investors with exposure to the world's leading cryptocurrency without necessitating direct ownership. The SEC has consistently rejected all spot Bitcoin ETF proposals, citing concerns about safeguarding investors against market manipulation.
Grayscale, however, has contended that its spot ETF should be deemed satisfactory under the same framework as the approved Bitcoin futures ETFs, which rely on market surveillance provided by the Chicago Mercantile Exchange, where a majority of Bitcoin futures are traded.
The appeals court found the SEC's rejection of Grayscale's application arbitrary, as it failed to explain material differences between the two products. DavisPolk emphasized, "If any other reason could be offered in attempting to differentiate" the two types of products, "we are confident that it would have surfaced by now."
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCN. The information provided in this article is for educational and entertainment purposes only and should not be construed as investment advice, or advice of any kind. BSCN assumes no responsibility for any investment decisions made based on the information provided in this article. If you believe that the article should be amended, please reach out to the BSCN team by emailing [email protected].
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