Grayscale urges SEC to speed up approval for Bitcoin ETF

Crypto asset manager Grayscale Investments wrote to the US Securities and Exchange Commission to speed up the process of approval for its proposed Bitcoin spot exchange-traded fund (ETF). Grayscale Investment’s appeal was mentioned in a letter written by its law firm and was sent on September 5, 2023.

The move comes in the wake of Grayscale Investments’ recent victory against the regulatory body in a lawsuit that the former had filed. In its lawsuit that was filed in 2022, the company challenged the SEC’s decision to reject its application for converting the Grayscale Bitcoin Trust into an ETF. Earlier in September, the US Court of Appeals for the DC Circuit had sided with Grayscale Investments and stated that the SEC had failed to adequately explain why it had approved the two other Bitcoin futures Exchange Traded Products and not Grayscale’s. 

The court stated that as there was no “coherent explanation”, the SEC’s decision amounted to “unlawful”. The case was heard by a three-judge panel and was closely watched by all quarters of the industry given how Bitcoin is among the Top 10 cryptocurrencies of the world.

As per the ruling, the SEC is required to revisit Grayscale’s application but the commission still has time to appeal against the ruling. Earlier in September, the SEC had maintained that it was still studying the judgment.

The letter stated that the firm felt that currently the “best use of resources” would be for the SEC to issue an approval order for the proposed ETF. A spot Bitcoin ETF would enable crypto users to explore new opportunities with Bitcoin, which is one of the most popular cryptocurrencies in the world, without owning it. Till now, the commission has rejected all applications for launching spot Bitcoin ETFs by claiming that the applicants have been unable to show how they can shield investors from market manipulators.

At the same time, the commission has given its approval to Bitcoin futures ETFs by entering into an arrangement for market surveillance with the Chicago Mercantile Exchange. Most Bitcoin futures trade at the Chicago Mercantile Exchange. In its lawsuit, Grayscale had argued that a similar agreement should be satisfactory for its spot ETF, as both the products leverage Bitcoin’s live cryptocurrency prices.

The US Appeals Court has also termed SEC’s decision to reject Grayscale’s application as “arbitrary” because it didn’t explain the difference between the two arrangements. Using the same argument, DavisPolk urged the SEC to cite another reason for differentiating between the two types of products.

About Grayscale Investments:

Grayscale has been developed as a “digital-native asset manager” for a world that’s rapidly gravitating towards digital-powered solutions. Founded in 2013, Grayscale helps investors explore different investment products in the digital economy. Its products include digital currency products that leverage both single assets and diversified funds. Another category of digital assets that one can find on Grayscale Investments is an ETF – the Grayscale Future of Finance of GFOF. The ETF invests in technologies and companies that are shaping the future of digital finance.  With GFOF, one can get to know about businesses that are playing a crucial part in developing the digital financial ecosystem.

Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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