Grayscale Asks SEC to Quickly Approve Its Spot Bitcoin ETF

Sahana Kiran
Source – TheStreet

After its recent court victory, Grayscale Investments is currently pushing the Securities and Exchange Commission [SEC] to promptly grant approval for a spot Bitcoin exchange-traded fund [ETF]. The attorneys representing the firm delivered a letter to convey the same to the regulators.

Last week, a panel of three judges from the District of Columbia Court of Appeals in Washington made a significant ruling. They found that the SEC had declined Grayscale’s spot Bitcoin ETF proposal without providing a clear rationale.

A spot Bitcoin ETF would provide investors with a means to invest in Bitcoin without the need to directly possess it. The SEC has rejected all spot Bitcoin ETF proposals until now. It contends that the applicants have failed to demonstrate their ability to safeguard investors from market manipulation.

Also Read: Grayscale’s Win a Catalyst for Bitcoin Innovation: Vivek Ramaswamy

Grayscale’s argument

Grayscale has contended that its proposed Bitcoin ETF, focused on the spot market, deserves approval. This is due to its reliance on the identical market surveillance framework employed by the Chicago Mercantile Exchange [CME]. It should be noted that the SEC has already considered CME’s framework satisfactory for Bitcoin futures ETFs. The appeals court concurred with this argument. They asserted that the SEC did not clarify why these two arrangements were significantly distinct. The lawyers said,

“We believe the commission should conclude that there are no grounds for treating the trust differently from ETPs [exchange-traded products] that invest in Bitcoin futures contracts. If any other reason could be offered in attempting to differentiate spot Bitcoin ETPs from Bitcoin futures ETPs…we are confident that it would have surfaced by now.”

Furthermore, the court’s decision mandates that the SEC reevaluate Grayscale’s application. However, the regulatory agency retains the option to challenge the court’s verdict. The SEC announced last week that it was in the process of examining the ruling. Meanwhile, Grayscale’s law firm, Davis Polk said,

“We hope you will agree that the best use of resources now is for the [SEC] to issue an order approving.”

Also Read: JPMorgan Says SEC Will Likely Approve Grayscale Spot Bitcoin ETF