• Grayscale is submitting a brief to the SEC in order to challenge the rejection of its proposal to turn its GBTC product into a spot Bitcoin ETF.
• The asset manager is arguing that the SEC acted arbitrarily and capriciously and discriminated against issuers when it authorized ETFs that carry bitcoin futures.
• If the arguments are successful, it could pave the way for a spot Bitcoin ETF to be approved by the SEC in the future.
Grayscale, one of the world’s leading asset management firms, is making a move to challenge the rejection of its proposal to turn its GBTC product into a spot Bitcoin ETF. The United States Securities and Exchange Commission (SEC) denied the application back in October of 2020, but Grayscale is now submitting a brief in the ongoing case to argue that the SEC erred in its decision.
Chief legal officer Craig Salm released information on the case via Twitter, saying that Grayscale will soon file the next brief in the lawsuit and that oral arguments may be as soon as Q2. The asset manager is arguing that the SEC acted arbitrarily and capriciously and discriminated against issuers when it authorized ETFs that carry bitcoin futures. This means that if Grayscale is successful in its arguments, it could pave the way for a spot Bitcoin ETF to be approved by the SEC in the future.
The SEC’s decision to reject Grayscale’s application was seen as a major roadblock for the cryptocurrency industry as a whole. The approval of a spot Bitcoin ETF would have opened the door for institutional investors to gain exposure to the digital asset class without having to purchase the underlying tokens directly. This would have allowed for a much larger influx of capital into the crypto space, which could have had a positive effect on the markets.
However, for the moment, the SEC has been unwilling to approve a spot Bitcoin ETF, citing concerns over market manipulation and potential investor losses. Grayscale is now attempting to challenge this decision in court and, if successful, it could be a major win for the industry.
It remains to be seen whether or not Grayscale will be able to convince the SEC to approve a spot Bitcoin ETF. The asset manager’s arguments are compelling, and a successful outcome could have a major impact on the cryptocurrency industry. It is certainly an interesting legal battle to keep an eye on, and one that could shape the future of digital assets for years to come.