The legal dispute between Grayscale and the SEC continues as the latter rejected the former’s attempts to convert their Grayscale Bitcoin Trust into a BTC ETF.
SEC’s Argument for Denying ETFs
The SEC claimed that the ETF did not provide enough protection for the average investor from “fraudulent and manipulative acts and practices”. Reports indicate that the SEC has used this same argument to decline almost all ETFs focused on bitcoin.
Grayscale argues that the SEC’s stance is illogical, stating: “Its central premise—that the Exchange’s surveillance-sharing agreement with the CME provides adequate protection against fraud and manipulation in the bitcoin futures market but not the spot bitcoin market—is illogical.”
Grayscale’s Argument
The regulator has already approved a couple of futures-based BTC ETFs. Grayscale argues that any fraudulent activities associated with the Bitcoin spot markets would affect BTC futures’ prices. The company mentions the Chicago Mercantile Exchange (CME) in their argument, stating that it’s illogical that the CME can protect holders of one type of ETP without protecting the other since simple spot prices will affect both.
BTC Price Rally
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Frequently Asked Questions
Grayscale is a digital asset management firm that offers investment products, such as the Grayscale Bitcoin Trust, which is a vehicle for investing in bitcoin.
Grayscale is criticizing the SEC for their stance on their attempts to convert their Grayscale Bitcoin Trust into a BTC ETF. The SEC denied the request, claiming that the ETF did not provide enough protection for the average investor from “fraudulent and manipulative acts and practices ”.
Grayscale argues that the SEC’s stance is illogical and that the regulator has already approved a couple of futures-based BTC ETFs. They argue that any fraudulent activities associated with the Bitcoin spot markets would affect BTC futures’ prices and that it’s illogical that the CME can protect holders of one type of ETP without protecting the other since simple spot prices will affect both.
The price rally is mainly connected to ETF acceptance in Hong Kong, where the Hong Kong Securities and Futures Commission approved BTC and ETH futures applications last December. Additionally, the HSE recently approved Samsung Asset Management’s request to list BTC ETFs, and Grayscale’s ongoing fight for approval may also be contributing to the rally.
The Grayscale Bitcoin Trust is a vehicle for investing in bitcoin offered by Grayscale, a digital asset management firm. It is a trust that holds bitcoin and is designed to provide investors with a means to gain exposure to the price movement of bitcoin.
The SEC (Securities and Exchange Commission) is a government agency that is responsible for protecting investors and ensuring fair and orderly markets. In the crypto industry, the SEC is responsible for regulating digital assets and securities, including ETFs and other investment products.
The SEC rejected Grayscale’s request on the basis that the ETF did not do enough to protect the average investor from “fraudulent and manipulative acts and practices.” The SEC has used this argument to decline nearly all ETFs focused on bitcoin.
The CME (Chicago Mercantile Exchange) is a global markets company that operates an options and futures exchange. Grayscale argues that it’s illogical that the CME can protect holders of one type of ETP without protecting the other since simple spot prices will affect both.
The Hong Kong Securities and Futures Commission approved BTC and ETH futures applications last December. The HSE recently approved Samsung Asset Management’s request to list BTC ETFs, allowing investors in Hong Kong to gain exposure to the price movement of bitcoin through an ETF. This has contributed to the recent price rally of BTC.
Investing in the Grayscale Bitcoin Trust is only available to accredited investors and qualified institutional buyers. Interested investors can apply to purchase shares of the trust through Grayscale’s website or through a financial advisor.
