SEC reiterates decision to reject Grayscale bitcoin spot ETF
The SEC argues that bitcoin futures ETFs are monitored by the Chicago Merc and spot bitcoin ETFs lack that level of oversight
The Securities and Exchange Commission has repeated its stance to reject Grayscale’s bid to launch a bitcoin ETF.
The SEC says such products are prone to fraud and manipulation, court records show, and reported by the Financial Times.
Grayscale claimed over the summer that the SEC was applying an unfair double standard by allowing bitcoin futures ETFs, but denying proposals for ETFs that invest in spot bitcoin.
The SEC’s first response to Grayscale’s lawsuit was that it had approved bitcoin futures ETFs because they are monitored closely by the Chicago Mercantile Exchange. Spot bitcoin ETFs, meanwhile, lack that level of federal oversight.
GRAYSCALE BID FOR SPOT BITCOIN ETF REJECTED BY SEC
Representation of cryptocurrency and Gayscale logo displayed on a phone screen. ((Photo by Jakub Porzycki/NurPhoto via Getty Images) / Getty Images)
Grayscale’s proposal to convert its Bitcoin Trust into an ETF was rejected by the SEC in June.
Grayscale then sued the regulator, alleging the commission was discriminating between issuers of the two types of ETFs on an "arbitrary and capricious" basis.
In October 2021, the ProShares Bitcoin Strategy ETF became the first bitcoin futures ETF.
Other bitcoin futures ETFs on the market include the $20mn Valkyrie Bitcoin Strategy ETF and the $21mn VanEck Bitcoin Strategy ETF.
The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington. (REUTERS/Jonathan Ernst/File Photo / Reuters Photos)
SEC SHUNNING BITCOIN OPPORTUNITY WITH SPOT ETF DENIAL: GRAYSCALE CEO
The SEC has rejected applications for bitcoin ETFs from a raft of companies, including WisdomTree, Fidelity and VanEck.
An illustration of bitcoins. (Photo by Fernando Gutierrez-Juarez/picture alliance via Getty Images / Getty Images)
The SEC also argued that bitcoin futures ETFs and spot bitcoin ETFs should be treated differently from one another because they pose different risks for investors.
Grayscale provided FOX Business with the following statement.
"The SEC’s mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. In denying Grayscale’s GBTC conversion proposal, the SEC is failing to fulfill its mission, particularly as it relates to the protection of investors. Crypto investors are calling for more regulated options. It is time that the SEC answers that call."
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The commission in a brief, urged the Washington, D.C., appeals court, where the case is filed, to affirm its view that it acted reasonably when rejecting Grayscale’s plans to convert its Bitcoin Trust.