Nexo

Start Earning Up to 16% Interest Automatically

Learn More
Home » News » Grayscale Strikes Back Against SEC’s ETF Rejections

Grayscale Strikes Back Against SEC's ETF Rejections

by

The firm criticizes the SEC's discrimination between spot and futures ETFs.

Grayscale Strikes Back Against SEC's ETF Rejections
Shutterstock photo by Images Products

Key Takeaways

  • Grayscale's legal representation has sent a letter to the SEC criticizing its discrimination between Bitcoin ETFs.
  • While the SEC has approved Bitcoin futures ETFs in recent months, it has not yet approved a Bitcoin spot ETF.
  • Grayscale's letter suggests that the SEC's discrimination may violate the Administrative Procedure Act.

Share this article

Grayscale has sent a letter to the SEC expressing opposition to the regulator’s repeated rejection of Bitcoin spot ETFs.

Grayscale Notes Spot and Futures Discrimination

Over the past several months, the U.S. Securities and Exchange Commission has rejected many Bitcoin spot ETFs, a type of exchange-traded fund tied to the value of Bitcoin market prices.

Grayscale argues that the SEC’s decisions were “arbitrary and capricious actions” under the Administrative Procedure Act (APA).

Specifically, Grayscale has criticized the SEC for approving ETFs tied to the value of Bitcoin futures (such as those recently created by ProShares, Valkyrie, and VanEck) while simultaneously rejecting spot ETFs tied to the market value of Bitcoin itself.

“The commission has no basis for the position that investing in the derivatives market for an asset is acceptable for investors while investing in the asset itself is not,” the letter reads.

In September, Grayscale CEO Michael Sonnenshein expressed similar sentiments. He called the SEC’s decision to approve Bitcoin futures ETFs before a Bitcoin spot ETF “shortsighted,” arguing that investors should have a choice between both types of product.

ETF Landscape Continues to Grow

Grayscale’s legal representation composed the letter in defense of NYSE Arca, an exchange that plans to list a spot ETF which would be converted from Grayscale’s Bitcoin trust (GBTC).

The SEC has been seeking comments on these plans since early November, and a decision could be reached as soon as Dec. 24.

However, based on previous events, it seems unlikely the SEC will approve this. The SEC rejected VanEck’s similar spot ETF this November and has also rejected numerous others in the past.

That said, if Grayscale’s accusations have legal grounding in the Administrative Procedure Act, the letter could possibly pave the way for future ETF applications and further challenges.

Disclaimer: At the time of writing this author held less than $100 of Bitcoin, Ethereum, and altcoins.

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.