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The Securities and Exchange Commission reiterated its position to reject Grayscale’s offer to launch a bitcoin ETF.
The SEC says these products are prone to fraud and manipulation, according to court records 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 closely watched by the Chicago Mercantile Exchange. Spot Bitcoin ETFs, on the other hand, lack this level of federal oversight.
GRAYSCALE BID FOR SPOT BITCOIN ETF REJECTED BY SEC
Representation of Gayscale cryptocurrency and 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 distinguished 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 $20 million Valkyrie Bitcoin Strategy ETF and the $21 million VanEck Bitcoin Strategy ETF.
The seal of the United States Securities and Exchange Commission hangs on the wall of SEC headquarters in Washington. (REUTERS/Jonathan Ernst/File Photo/Reuters Photos)
SEC AVOIDING BITCOIN OPPORTUNITY WITH ETF REJECTION SPOT: GRAYSCALE CEO
The SEC has rejected bitcoin ETF applications from a range 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 bitcoin spot ETFs should be treated differently from each other because they pose different risks to investors.
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The commission, in a brief, urged the appeals court in Washington, DC, where the case is filed, to affirm its view that it acted reasonably in rejecting Grayscale’s plans to convert its Bitcoin Trust.
FOX Business has contacted Grayscale for comment.
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