Categories: Finance

SEC: Grayscale justifiably refused to launch a spot Bitcoin ETF

SEC: Grayscale justifiably refused to launch a spot Bitcoin ETF

The US Securities and Exchange Commission (SEC) continues to believe that bitcoin futures and spot exchange-traded funds are different products.

The American regulator gave its response to the management company Grayscale Investments regarding the rejection of the application to convert the GBTC trust into a spot exchange-traded fund (ETF) for bitcoin. The SEC believes that the refusal to approve the launch of a cryptocurrency exchange-traded fund was “reasonable and reasonably explained”:

“The Commission has previously approved ETFs that are based on CME futures contracts registered with the CFTC; thus, the underlying assets of these funds are subject to strict supervision. The BTC spot market, in contrast, is fragmented and unregulated. The Applicant has not presented a strong case for the thesis that the CME’s oversight of futures trading would be sufficient to detect and deter fraud and manipulation in the spot market.”

The Grayscale team noted that the regulator’s statement is an important step in the legal proceedings that the company started after the SEC refused to approve the launch of an ETF for bitcoins. Grayscale believes the SEC is biased in spot cryptocurrency ETFs because regulators have previously approved bitcoin futures ETFs.

In August, Grayscale Investments sued the US Securities and Exchange Commission, demanding that the SEC’s refusal be overturned. According to Grayscale, the Commission should allow the transfer of GBTC to ETFs, since such products are already traded on the stock exchanges.

Source: Bits