• Grayscale and the SEC are in a legal battle after the SEC denied Grayscale’s attempt to convert their Grayscale Bitcoin Trust into a BTC ETF.
• The SEC claimed the new ETF did not do enough to protect the average investor from “fraudulent and manipulative acts and practices.”
• Grayscale argues that CME can protect holders of one type of ETP without protecting the other since simple spot prices will affect both, and BTC has recently seen a strong price rally.
The legal dispute between Grayscale and the U.S. Securities and Exchange Commission (SEC) is continuing, as Grayscale has slammed the SEC’s stance on their attempt to convert their Grayscale Bitcoin Trust into a BTC exchange-traded fund (ETF). The SEC rejected the proposal, claiming that the proposed ETF failed to adequately protect investors from “fraudulent and manipulative acts and practices” in the spot bitcoin market.
Grayscale argues that the SEC’s stance is illogical. They point to the fact that the Chicago Mercantile Exchange (CME) is responsible for monitoring and preventing instances of fraud and manipulation that could affect asset prices, and that any fraudulent activities associated with the spot bitcoin markets would inevitably affect the futures market as well. Therefore, since CME is capable of protecting holders of one type of ETF, it should also be able to protect holders of the other.
The SEC has already approved several BTC-ETFs that are based on futures, but Grayscale is determined to challenge the regulator’s stance on their proposal. Despite the legal setback, bitcoin has seen a recent surge in its price, which is currently hovering around $19,300.
In the meantime, Grayscale is continuing to challenge the SEC in court, and we can expect the legal dispute between the two to continue for some time. As the two sides battle it out in court, the future of the Grayscale Bitcoin Trust remains uncertain.