Grayscale Takes Complaint Against SEC to Court
Grayscale, the owner of the world’s largest Bitcoin fund, is frustrated with the SEC’s approval of a leveraged Bitcoin futures ETF. The firm argues that the approval strengthens its case that the SEC’s denial of its Bitcoin spot ETF application is discriminatory. Grayscale has written a letter to the Court of Appeals for the DC Circuit, explaining the risks involved with the recently approved Volatility Shares’ 2x Bitcoin Strategy ETF. The firm believes that this leverage product is even riskier than traditional Bitcoin futures exchange-traded products. Grayscale’s core legal argument against the SEC is that CME Bitcoin Futures, the market it intends to form a surveillance-sharing agreement with, are directly linked to the Bitcoin spot market.
Key Points:
- Grayscale is frustrated with the SEC’s approval of a leveraged Bitcoin futures ETF.
- The firm argues that the approval strengthens its case against the SEC’s denial of its Bitcoin spot ETF application.
- The recently approved Volatility Shares’ 2x Bitcoin Strategy ETF is deemed riskier than traditional Bitcoin futures products by Grayscale.
- Grayscale’s core legal argument is that CME Bitcoin Futures, the market it intends to form a surveillance-sharing agreement with, are directly linked to the Bitcoin spot market.
- Grayscale believes that allowing spot Bitcoin ETFs to trade is the only way to eliminate the SEC’s unequal treatment of Bitcoin-based ETPs.
Hot Take:
Grayscale’s frustration with the SEC is understandable, as the approval of a leveraged Bitcoin futures ETF raises questions about the regulator’s consistency in evaluating Bitcoin-related products. The argument that the recently approved ETF is riskier than Grayscale’s spot ETF application highlights the inconsistency further. It remains to be seen how the court will rule on Grayscale’s complaint and whether it will bring about any changes in the SEC’s approach to Bitcoin ETFs.
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