- Grayscale Investments asserts that the SEC has “no grounds” to reject the conversion of its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF), following a court-ordered review of the initial rejection.
- Grayscale challenges the SEC’s history of rejecting spot Bitcoin ETFs, arguing its proposed product isn’t materially different from existing Bitcoin futures exchange-traded products.
A Judicial Prompt for Regulatory Reflection
Grayscale Investments, a leading player in the cryptocurrency investment landscape, has thrown down the gauntlet, telling the U.S. Securities and Exchange Commission (SEC) that it has “no legitimate basis” to reject the transformation of its Grayscale Bitcoin Trust (GBTC) into an Exchange-Traded Fund (ETF). This audacious stance follows a court ruling from the D.C. Circuit Court of Appeals, which ordered the SEC to review its previous refusal of Grayscale’s application.
For context, ETFs are investment funds traded on stock exchanges, akin to individual stocks. They offer a diversified yet liquid means to invest in various asset classes. Grayscale’s argument hinges on Circuit Judge Neomi Rao’s concurrence with the firm’s assertion that its proposed ETF product is not substantially divergent from existing Bitcoin futures exchange-traded products (ETPs) that currently trade on U.S. exchanges. ETPs are, broadly speaking, types of ETFs specifically built around derivative contracts such as futures, rather than holding the asset itself.
In a communique dispatched to the regulator, Grayscale’s legal team posited,
“After the Commission has had the opportunity to fully analyze the court’s opinion in light of the record, including the reasons for rejection set forth … we believe the Commission should conclude that there are no grounds for treating the Trust differently from ETPs that invest in bitcoin futures contracts.”
>> Buy Bitcoin quickly and securely with PayPal, credit card or bank transfer at eToro with low fees and deposit protection. Get started with BTC now. Visit Website <<
Further intensifying its push, Grayscale took a calculated swipe at the SEC’s spotty record of denying applications for spot Bitcoin ETFs, which are funds that would directly hold Bitcoin rather than its futures contracts. The firm illuminated that any supposed distinction between its proposed product and futures-based counterparts
“would have surfaced by now in one of the 15 Commission orders that rejected spot Bitcoin Rule 19b-4 filings even after Bitcoin futures ETPs began trading.”
It’s crucial to note that while last week’s court decision mandated a regulatory reevaluation, it didn’t direct the SEC to approve Grayscale’s application. Nonetheless, Grayscale’s tenor suggests a confident presumption that regulatory approval is nigh inevitable, given the weight of judicial and market precedents.
Best Crypto Exchange for Everyone:
- Invest in Bitcoin (BTC) and 70+ cryptocurrencies and 3,000+ other assets.
- 0% commission on stocks – buy in bulk or just a fraction from as little as $10.
- Copy top-performing traders in real time, automatically.
- Regulated by financial authorities including FAC and FINRA.
2.8 Million Users