The crypto asset management firm Grayscale is suing the US Securities and Exchange Commission (SEC) as they have argued for the approval of their Spot Bitcoin ETF. Specifically, the firm has cited the regulator’s approval of a leveraged future Bitcoin ETF. Stating that it provides reasoning as to why it should have also been approved.
Grayscale released a letter that highlights “the disparity between the SEC’s approval of a leveraged Bitcoin futures ETF while continuing to deny approval for Spot Bitcoin ETFs,” in a Tweet sent out by the company. The letter was addressed to the US Court of Appeals for the District of Columbia Circuit. Moreover, it arrives amid a host of companies seeking approval for Spot Bitcoin ETFs.
Also Read: Former SEC Chair Says Bitcoin ETF Should be Approved
Greyscale Argues Against Spot Bitcoin ETF Rejection
This year, a host of companies have sought to formulate a Spot Bitcoin ETF. Indeed, a race to submit a filing started with asset management firms BlackRock and Fidelity. These traditional finance firms have sought to establish a point of entry into the digital asset sector. Yet, they all remain at the mercy of the SEC, which has yet to approve the creation of such a product.
Now, crypto firm Greyscale is speaking out and arguing for their Spot Bitcoin ETF approval from the SEC. Specifically, the firm has argued that the approval of a Leveraged Bitcoin Futures ETF is the basis for their approval as well. However, the company had its ETF application attempt rejected last year.
Also Read: BlackRock and Fidelity to Meet with SEC OVer Spot Bitcoin ETF
Greyscale argues that the approved Leverage ETF is “even riskier,” than traditional spot Bitcoin ETFs. Moreover, in the letter, Grayscale’s lawyer spoke about the perceived inconsistent decision-making by the agency.
“While the commission could theoretically correct its discriminatory treatment of spot Bitcoin ETPs by rescinding its approval of all Bitcoin-based ETPs… The Commission’s apparent willingness to permit even a leveraged Bitcoin futures ETP—particularly a high-risk version of a Bitcoin futures product—makes clear [it] has no intention of doing so,” the lawyer said in the letter.
The specific rejection in question was regarding the Grayscale application to convert Grayscale Bitcoin Trust (GBTC) to an ETF. Following the rejection, the company filed a lawsuit against the agency. Specifically, it states that it violated the Administrative Procedures Act. Amidst the influx of Spot Bitcoin ETF applications, many view approval as imminent. Whether or not that is true remains to be seen.