- The SEC has filed its first legal brief as part of the GBTC lawsuit. And their filing is challenging the decision of Grayscale.
Grayscale Investments, an American digital currency asset management company and subsidiary of Digital Currency Group, updated the SEC response under the GBTC lawsuit.
The firm added the Security and Exchange Commision (SEC) has filed its first legal brief as part of Grayscale’s lawsuit. The SEC is challenging the decision of Grayscale to deny $GBTC’s conversion to a spot Bitcoin ETF.
Grayscale shared some of their ‘key arguments.’ In which the firm said SEC filed its first legal brief as part of Grayscale lawsuit challenging their decision to deny GBTC’s conversion to a spot Bitcoin ETF.
The firm called this as the next milestone in their ongoing litigation following the filing of their opening brief on October 11 and the supporting amicus briefs shortly after.
Grayscale believes that the SEC’s refusal to bring Bitcoin further into the regulatory perimeter goes against its investor protection mandate. There is a small doubt as the US investment community would greatly benefit from regulated access to Bitcoin, as spot ETFs would allow investors to gain exposure to Bitcoin through the trusted, familiar, proven protections of an ETF wrapper.
GBTC Lawsuit’s 3-Key Points
Grayscale reiterated some of the arguments from their opening brief.
- The asset management firm firstly mentioned that SEC is creating an uneven playing field for investors by approving Bitcoin futures-based ETFs, while continuously denying spot Bitcoin ETFs.
The firm gave the example as the recent collapse of FTX International, one of the largest crypto exchanges by volume, and the volatility that has since ensued, the index that GBTC uses (and would continue to use as an ETF) has been pricing in substantially the same way as the index used by Bitcoin futures on the CME.
- Secondly, Grayscale noted that in approving Bitcoin futures-based ETFs but not spot Bitcoin ETFs, the SEC has failed to abide by the Administrative Procedure Act (APA) and Securities Exchange Act of 1934 (Exchange Act).
- The SEC has not articulated a basis for the dissimilarity in its treatment of spot Bitcoin ETFs and Bitcoin futures ETFs – and, in fact, they have created a “significant market test” which is being applied inconsistently for each product type.
However, in the 73-page response brief, the SEC reasoned its rejection was “reasonable, reasonably explained, supported by substantial evidence.”
Source: https://www.thecoinrepublic.com/2022/12/11/sec-filed-first-legal-brief-as-grayscale-challenged-their-decision/