Grayscale Sues SEC For Rejection Of Bitcoin ETF Proposal
The United States Securities and Exchange Commission (SEC) has rejected Grayscale’s proposal to convert its flagship product, Grayscale Bitcoin Trust (GBTC), into a Bitcoin spot ETF.
Grayscale is getting ready to sue the SEC
On June 30, the United States Securities and Exchange Commission (SEC) rejected Grayscale’s proposal to convert Bitcoin Trust (GBTC) into a Bitcoin ETF after many renewals. It rejected Bitwise’s proposal to establish a Bitcoin spot ETF. As such, the SEC has yet to authorize the listing of a Bitcoin spot ETF, although Grayscale recently revealed a lot of progress in a meeting with the SEC.
In the disclaimer, the SEC mentioned market risks that Bitcoin cannot address, including wash trading, market manipulation “whales”, hacking and security issues on exchanges, and asymmetry information on the market (many parties have “confidential information” compared to ordinary investors), risks from stablecoins like USDT, and the reality of fraud/scams on major Bitcoin exchanges.
For its part, Grayscale stated that it disagreed with the SEC’s ruling and filed a complaint with the US Securities and Exchange Commission. Accordingly, the Washington DC Court of Appeals filed a petition for reconsideration.
Grayscale has previously stated that it is ready to sue the SEC for unfair treatment. The reason is that while it has accepted Bitcoin ETF products based on futures (futures), the SEC still says no to futures contracts that settle directly in Bitcoin (spot).
Previously, the crypto industry’s largest asset manager had prepared to pass an agreement with Jane Street and Virtu to close a GBTC discount if approved by the SEC. However, Grayscale said it has prepared for all possible scenarios and has beefed up legal resources for unexpected endings.
The company has been applying for a Bitcoin ETF listing since last October. However, since then, the company has continuously been entangled in a rather fierce conflict with the SEC. Therefore, until recently, when Grayscale revealed that it had reached a consensus with the SEC, all expectations were poured into the world’s largest cryptocurrency investment fund.
Meanwhile, Grayscale’s direct counterpart is ProShares, known through the first Bitcoin ETF in the US that has, in turn, approved many derivative ETFs by the SEC. Most recently, ProShares launched its first “short” Bitcoin ETF, and the SEC’s reluctance to accept such a product has disappointed the community.
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