Grayscale criticizes the SEC for not treating Bitcoin ETFs the same as those based on BTC futures

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Grayscale criticizes the SEC for not treating Bitcoin ETFs the same as those based on BTC futures By Angel Di Matteo @shadowargel

About, Grayscale brands as arbitrary the perspective of SEC for prioritizing ETF of futures of Bitcoin and deny those fully based on digital currency.


The operating company of investment funds based on cryptocurrencies, Grayscale Investment, harshly criticized the Securities and Exchange Commission (SEC) of the United States due to the refusal to officially accept the launch of a ETF based on Bitcoin, despite the fact that in October it accepted the issuance of those that are based on digital currency futures.

Grayscale criticizes the SEC

This was stated by the team of Grayscale in a statement addressed especially to the secretary of the SEC, Vanessa Countryman, where the company expressed its rejection of the agency’s refusal to accept the launch of a Bitcoin ETF, this after denying the request submitted by VanEck and suppose that the applications of other entities will also go the same way.

Perhaps one of the harshest comments made in the statement is when it alleged that the SEC “It has no basis to ensure that investing in the derivatives market for an asset is acceptable to investors, while investing in the asset itself is not”. This statement points directly to the fact that the regulatory entity did accept the requests for ETF’s of futures of Bitcoin presented by VanEck, Valkyrie, and ProShares.

Let us bear in mind that the futures of Bitcoin differ from BTC as such. In the first case, the price depends on expectations about the future, hypothesizing values ​​based on projections, while when negotiating on the digital currency, the market price at the moment is taken as a basis.

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The ETF would follow this same principle, providing greater exposure to investors to the digital currency, although there is still some rejection by the SEC to accept one fully based on cryptocurrency, under the premise that the risks of manipulation and price volatility are not adequately addressed.

Lawsuit on the way?

However, everything seems to indicate that Grayscale would be prepared to take legal action against what it qualifies as arbitrary measures on the part of the SEC, since there would be alleged violations of the Administrative Protection Act (APA) for not treating the Bitcoin ETF in the same way that it treats digital currency futures.

In this regard, the vice president of the legal department for Grayscale, Craig Salm, commented:

“Last night, our attorneys at Davis Polk sent a letter to the SEC arguing that the approval of Bitcoin futures-based ETFs, but not Bitcoin spot-based ETFs, such as $ GBTC, is’ arbitrary. and capricious’ and therefore violates administrative rules. Procedural Law (APA) ”.

Specifically, Craig and his team cite the following:

“We believe that this rationale did not adequately take into account significant regulatory and competitive developments since 2017 when the Commission first considered, and denied, a request from a national stock exchange to list and trade shares of a spot Bitcoin ETP.” .

Market advances in other latitudes

Outside of the indications made by Grayscale, The truth is that although the US has not yet decided whether or not to accept the ETF based in Bitcoin, interested operators are beginning to look at other latitudes to launch this type of product.

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For example we have the case of Fidelity, company that is also awaiting verdict from the SEC to launch a Bitcoin ETF In the US, the company finally launched this product in the Canadian market precisely to advance ground in a country with clearer regulations.

Currently, several operators are also looking favorably on the Canadian market precisely because they are more open to this type of possibility. For now, we only have to wait and see how the American panorama evolves, and see if they officially open space for this class of financial products based on Bitcoin

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Source: SEC, Cointelegraph, TrustNodes

Version by Angel Di Matteo / Daily bitcoin

Picture of Unsplash

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