Grayscale Slams the ‘Unreasonable Barring’ of Spot Bitcoin ETFs by the SEC

Grayscale, a digital asset manager company, has criticized the U.S. securities regulator’s “illogical” argument against approving a spot Bitcoin exchange-traded funds (ETF) in a new court filing.

The Securities and Exchange Commission (SEC) requested that Friday’s document be filed. December defense This is its decision to reject Grayscale Investment’s application to convert its flagship Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF.

Grayscale applied for the SEC’s rejection on June 29, 2022. filed a lawsuit requesting the U.S. Court of Appeals in the District of Columbia Circuit to review the order. There are a few exceptions to this rule. industry players rallied around GrayscaleThe SEC stood behind the SEC’s decision. rejection of the conversionallowing investors to own bitcoin directly.

The SEC has approved multiple applications to set up futures-based bitcoin ETFs, which are trade agreements to be executed at a future date and price, the regulator has said spot bitcoin ETFs are vulnerable to “fraudulent and manipulative conduct.”

Grayscale countered this argument Friday. It said that “a successful manipulation of prices in the spot bitcoin market would necessarily affect the price of bitcoin futures as well – and, therefore, the value of bitcoin futures ETPs’ holdings.” Grayscale called SEC’s reasoning “illogical.”

Grayscale also accused SEC officials of overstepping their statutory authority. He claimed that the agency is not authorized to make decisions for investors about whether certain investments have merit.

Final briefs on the case are due Feb. 3, after which three judges will be selected and the court will share a schedule for the lawsuit’s oral arguments, Grayscale Chief Legal Officer Craig Salm said in a separate blog post. He stated that a final decision in the case could be reached by the fall.

Grayscale’s parent company Digital Currency Group (DCG) and its founder and CEO Barry Silbert have been under increasing pressure to take action about GBTC’s high discount to net asset values.

CoinDesk is also owned by DCG.

Continue reading: SEC Strikes Back in Grayscale Suit Over GBTC ETF Conversion