Grayscale reports that the SEC has submitted the first brief in the ongoing bitcoin futures ETF case
Grayscale Investments said that the SEC has submitted its first legal brief in the crypto asset manager’s action against the SEC over the denial of its application for a spot bitcoin exchange-traded fund.
Grayscale Investments said that the U.S. Securities and Exchange Commission has submitted its first legal brief in the crypto asset manager’s case against the SEC over the denial of its application for a spot bitcoin exchange-traded fund.
“This is the next major step in our continuing case, after the submission of our opening brief on October 11 and amicus briefs immediately thereafter,” the business stated in a statement released on Friday.
In an initial brief filed in October, Grayscale’s legal argument relied on what it said was an inconsistent implementation of the law after authorities allowed bitcoin futures connected to spot prices. Grayscale’s attempt to convert its flagship GBTC fund into an exchange-traded fund (ETF) was denied by the SEC in late June, and the firm argues that the denial hurts the trust’s 850,000 existing shareholders.
The SEC stated in its 73-page response brief that their rejection was “reasonable, reasonably explained, and backed by significant evidence” and that there was “no contradiction in the Commission’s denial of Grayscale’s spot ETP while having authorized two CME bitcoin futures ETPs.”
“The Commission previously authorized ETPs that hold only futures contracts that trade on the CME, which is registered with the CFTC; the underlying assets of these ETPs are thus subject to stringent oversight,” the document said. “The bitcoin spot market, by contrast, is fragmented and unregulated, and petitioner presented no supportable basis to conclude that the CME’s surveillance of futures trading would adequately detect and deter fraud and manipulation aimed at the bitcoin spot market, thereby protecting Grayscale’s product from fraud and manipulation.”
The SEC said that its rejection of Greyscale’s proposed ETF did not represent an underlying concern “Investment-inappropriate, merit-based criticism about bitcoin.
Grayscale reaffirmed its claims from its initial brief in response to the SEC filing and accused the SEC of “creating an unequal playing field for investors by accepting Bitcoin futures-based ETFs while consistently refusing spot Bitcoin ETFs.”
“We look forward to analyzing the SEC’s reply brief,” the business said, adding that its next brief is due on January 13, followed by the final briefs on February 3.
The discount ratio between the price of GBTC and the bitcoin it really holds reached 47.3% on Wednesday, according to statistics from The Block. The fund trades at a discount to its net asset value since shares do not provide access to the fund’s underlying assets.