The SEC will be held accountable for its denial. The Securities and Exchange Commission (SEC), one of the two major US financial regulators, continues to reject a “spot” Bitcoin (BTC) ETF. The Grayscale Investments group believes this judgment to be wholly unwarranted. Therefore, the latter has now filed an appeal with the US Court of Appeals.
WHY DO WE ACCEPT DERIVATIVES OF BTC BUT NOT REAL BTC?
The Securities and Exchange Commission accepted the first Bitcoin ETF just one year ago, in October 2021. (exchange-traded fund). Problem: The ProShares Bitcoin Strategy ETF (BITO) and any future offerings will be based on derivatives of the Bitcoin currency. Futures that are settled in dollars under forward contracts.
But the SEC has consistently rejected all allegedly “spot” ETFs. Specifically, investments based on genuine, highly volatile bitcoins. Given that Grayscale’s spot ETF proposal is predicated on the conversion of its Grayscale Bitcoin Trust (GBTC) fund, these denials are all the more objectionable. The latter, meanwhile, has been around since — wait on — September 2013!
The SEC’s impunity is coming to an end, according to Grayscale, which also files the opening brief in its case against the financial regulator in a news release issued on October 11, 2022. Conflict is declared in the following ways:
“The brief argues that the SEC’s refusal to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF was: arbitrary, capricious, and discriminatory. “
GRAYSCALE WON’T ALLOW IT TO EASILY DRY OFF.
The United States Court of Appeals for the District of Columbia Circuit is therefore able to hear the Grayscale v. Securities Commission case. The cryptocurrency-focused investment fund contests the SEC’s decision to prohibit its BTC spot ETF on June 29, 2022.
“In 2021 and 2022, the SEC approved several ETFs based on bitcoin futures, but repeatedly rejected ETFs that directly hold bitcoin. (…) The brief points out that bitcoin futures (futures) and spot bitcoins (spot) both generate their price based on overlapping indices. So the spot price of Bitcoin in every product is subject to the same risks and protections. »
Thus, Grayscale’s brief criticizes “flagrant arbitrariness” and highlights the “special severity” of the SEC’s testing procedures for ETFs that are “and only to these” directly tied to Bitcoin.
Additionally, Grayscale cites the fact that “almost 850,000 Americans” now own shares of its GBTC. The extremely aggressive cryptocurrency investment fund says it is “looking forward” to the SEC’s answer. Unfortunately, the latter enjoys playing the watch and is a master at kicking into touch. Grayscale consequently anticipates a court battle lasting a year to two years before the US Securities Commission is corrected.
