In SEC Lawsuit, Grayscale Calls Spot ETF Rejection Discriminatory

[Hydrogen]

Grayscale Investments called the the U S. Securities and Exchange Commission's (SEC) June decision to reject its application to convert its flagship Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange traded fund (ETF) “arbitrary, capricious, and discriminatory" in an opening legal brief filed as part of its lawsuit against the regulator.

Grayscale filed suit against the SEC on June 29th, asking the U.S. Court of Appeals for the District of Columbia Circuit to review the regulator’s decision, which the SEC has published earlier in the day.

Grayscale is a wholly-owned subsidiary of Digital Currency Group, the parent company of CoinDesk.

Grayscale is far from the only company whose spot bitcoin ETF application has been rejected – over the last year, the SEC has denied over a dozen similar applications from other major players in the crypto space, including WisdomTree and Ark21Shares, citing a lack of investor protections and the potential for fraud and manipulation.

WisdomTree's latest application was rejected the same day Grayscale filed its brief.

While the agency has repeatedly rejected bitcoin spot ETF applications, it has approved several bitcoin futures ETFs, making a distinction between the offerings that Grayscale’s lawyers say is “arbitrary” and “outside the Commission’s authority.”

In the brief, the attorneys argue that, because Bitcoin futures and spot Bitcoin both generate their price based on overlapping indices, the spot price of Bitcoin in both spot and futures ETFs are subject to the same risks – and therefore, approving one and denying another is unfair.

“The Administrative Procedure Act and Exchange Act require rules and regulations to be applied without favoritism for one type of product or another,” said Craig Salm, Grayscale’s Chief Legal Officer, in a press statement.

The SEC’s response is due Nov. 9.


https://www.yahoo.com/video/sec-lawsuit-grayscale-calls-spot-001120838.html

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So it seems Grayscale's lawsuit against the SEC refusing to greenlight crypto based ETFs, in the united states, is progressing.

The following is a summary of Grayscale's legal claims:

In the brief, the attorneys argue that, because Bitcoin futures and spot Bitcoin both generate their price based on overlapping indices, the spot price of Bitcoin in both spot and futures ETFs are subject to the same risks – and therefore, approving one and denying another is unfair.

The SEC has been more active in 2022 than I remember them being throughout their entire history. Aside from Bernie Madoff I don't remember the SEC cracking down much on wallstreet. Someone refresh my memory. What are some of the classic SEC keynote investigations I'm forgetting?

[adaseb]

I’ve been watching this GBTC and honestly the -35% discount is just too crazy to ignore. Basically it’s like buying at $13K or so. If Bitcoin dumps further it’ll be like buying Bitcoin at $10K pretty much.

Only issue? How long will you need to bag hold this before it actually meets par. I am guessing it’ll be years by the way SEC makes decisions.

[mk4]

I’ve been watching this GBTC and honestly the -35% discount is just too crazy to ignore. Basically it’s like buying at $13K or so. If Bitcoin dumps further it’ll be like buying Bitcoin at $10K pretty much.

Only issue? How long will you need to bag hold this before it actually meets par. I am guessing it’ll be years by the way SEC makes decisions.

Or better yet — will GBTC actually get to be converted to a Spot ETF someday? I have no clue about this regulatory-wise, but it's probably safe to assume that the chances of it not being converted to a spot ETF is non-zero.

[hugeblack]

I think we'd have better discussions if all the discussions about Grayscale were in one topic, and it's already here ----> Everything you wanted to know about Grayscale BTC Trust
Or at least move to legal board, as topic is more legal than economic.

Overall, the court's decision will be slower than the political decisions and with the current market policy and fear of recession I don't think we will see any progress on the Spot ETF until the middle of next year at best, if not two or three years.

[justdimin]

I’ve been watching this GBTC and honestly the -35% discount is just too crazy to ignore. Basically it’s like buying at $13K or so. If Bitcoin dumps further it’ll be like buying Bitcoin at $10K pretty much.

Only issue? How long will you need to bag hold this before it actually meets par. I am guessing it’ll be years by the way SEC makes decisions.

That is something to take a risk on. I am not saying that it makes sense to buy at this cheap, because it doesn't guarantee you any profits at all, but at the end of the day if it makes you any profit in the end, then it was a good risk to take.

Doesn't matter how long it takes, the only question that matters is, how much you could make from it, if you believe that you would make a great return from this then it makes sense to invest into it, if it doesn't make sense to make and you won't make a profit then it would be smarter to invest into something else. Time doesn't matter here, because time will matter in something else as well, it's mute point.