Grayscale Replies to SEC, Argues That Bitcoin (BTC) Spot ETF Denial Is Illogical

Crypto hedge fund Grayscale has told the U.S. Securities and Exchange Commission (SEC) to deny Bitcoin (Bitcoin) exchange traded funds (ETFs) are “illogical”.

Reply to Brief Filed by SEC Last Month, Grayscale To tell Converting the Grayscale Bitcoin Trust (GBTC) to a Spot BTC ETF will greatly benefit traders by unlocking value and increasing investor protection.

“For our 850,000+ investors, converting GBTC into a spot Bitcoin ETF would provide the necessary deregulation for the product to simultaneously create and redeem equities, thereby addressing both equity premiums and discounts.” arbitrage will be possible, unlocking over $4 billion in value compared to net asset value.

The conversion will also ensure that GBTC trading will be subject to increased regulatory standards and better protection for investors. U.S. investors need and won’t get the investment exposure to Bitcoin they deserve as the SEC is reluctant to bring Bitcoin further into the regulatory perimeter via spot Bitcoin ETFs. was. “

grayscale first sued Filed with the SEC in June 2022. In an October 2022 filing, the company said Alleged Regulators were showing bias when they rejected a hedge fund bid for a bitcoin ETF in June.

In the lawsuit, Grayscale alleges that the SEC approval of other BTC-related products, such as approval of a BTC futures ETF on the Chicago Mercantile Exchange (CME), is inconsistent with its rejection of the Bitcoin ETF.

In official court filings, grayscale refer We disagree with the SEC’s decision to grant CME futures BTC ETFs on the basis that the level of security is “illogical” because the same type of security would be required to operate a BTC ETF.

“The order in this case is arbitrary in nature. The exchange monitoring sharing agreement with the CME provides adequate protection against fraud and manipulation in the bitcoin futures market, but not the spot bitcoin market. Its central premise is illogical.

Fraud and manipulation in the spot market will inevitably affect the price of Bitcoin futures and affect the net asset value of the ETP. [exchang-traded product] Not only does it hold either physical Bitcoin or Bitcoin futures, it also holds the price investors pay for shares in such ETPs. “

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