Court Ruling Favors Grayscale; SEC to Appeal
A recent court ruling has favored Grayscale, asking the SEC to review the application of the crypto asset manager. However, the SEC intends to appeal this decision.
Grayscale’s Lawyer Points Out Inconsistencies in SEC’s Approach
In a letter to the SEC, Joseph Hall of Davis Polk, representing Grayscale, highlighted the inconsistencies in the SEC’s approach towards a Bitcoin ETF. The letter emphasized that there should be no differentiation between the trust and exchange-traded products that invest in Bitcoin futures contracts.
“We believe the commission should conclude that there are no grounds for treating the trust differently from ETPs [exchange-traded products] that invest in Bitcoin futures contracts.”
Grayscale argues that its proposed spot Bitcoin ETF should be approved, as it would rely on the same market surveillance arrangement approved for Bitcoin futures ETFs.
Urging the SEC to act promptly, Joseph Hall stated that if there were any legitimate reasons to differentiate spot Bitcoin ETPs from Bitcoin futures ETPs, they would have already been identified.
Lawyer Claims Delaying Spot Bitcoin ETF Approval Would Harm Investors
In its letter, Grayscale expressed the urgency of approving the spot Bitcoin ETF and highlighted the potential harm to investors if the approval is delayed.
Joseph Hall concluded the letter by stating, “We believe the trust’s nearly one million investors deserve a fair playing field as quickly as possible.”
Hall argued that American investors are currently dealing with more complex product structures compared to the straightforward spot Bitcoin ETFs. He cited the significant influx of funds into Bitcoin futures ETFs following the recent court ruling.
According to legal expert Felix Shipkevich, it is highly unlikely for the SEC to appeal the court’s decision, and the approval of a spot Bitcoin ETF is imminent.
Hot Take
The court ruling in favor of Grayscale and the lawyer’s arguments against differentiating spot Bitcoin ETFs from Bitcoin futures ETFs highlight the need for consistent regulations in the crypto industry. The approval of a spot Bitcoin ETF would provide a fair and streamlined investment option for investors, reducing complexity and promoting market growth.
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