The Securities and Exchange Commission has reiterated its position to reject Grayscale’s bid to launch a bitcoin ETF.
The SEC says such products are prone to fraud and manipulation, according to court records and reported by the Financial Times.
Grayscale argued over the summer that the SEC was applying an unfair double standard by allowing bitcoin futures ETFs but rejecting proposals for ETFs that invest in bitcoin.
The SEC’s first response to Grayscale’s lawsuit was that it approved bitcoin futures ETFs because they are closely monitored by the Chicago Mercantile Exchange. Spot bitcoin ETFs, meanwhile, don’t have that level of federal oversight.
SPOT BITCOIN ETF Grayscale Application Denied by SEC
Grayscale’s proposal to turn its Bitcoin Trust into an ETF was rejected by the SEC in June.
Grayscale then sued the regulator, alleging the commission discriminated between issuers of the two types of ETFs on an “arbitrary and capricious” basis.
In October 2021, the ProShares Bitcoin Strategy ETF became the first bitcoin futures ETF.
Other Bitcoin futures ETFs in the market include the $20 million Valkyrie Bitcoin Strategy ETF and the $21 million VanEck Bitcoin Strategy ETF.
SEC DESTROYES BITCOIN’S POSSIBILITY WITH SPOT ETF DENIAL. CEO of GRAYSCALE
The SEC has rejected applications for bitcoin ETFs from a number of companies, including WisdomTree, Fidelity and VanEck.
The SEC also argued that bitcoin futures ETFs and spot bitcoin ETFs should be treated differently because they present different risks to investors.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
The commission briefly urged the Washington appeals court, where the case was brought, to uphold its view that it acted reasonably in rejecting Grayscale’s plans to convert its Bitcoin Trust.
FOX Business has reached out to Grayscale for comment.