Grayscale Drags Regulator SEC To Court
Grayscale, a digital asset management company, blasted the US Securities and Exchange Commission in a new court filing for its “illogical” and “fundamentally unreasonable” argument against approving a spot bitcoin ETF.
The document, which was filed on January 13th, was in response to the Securities and Exchange Commission’s (SEC) December defence of its decision to deny Grayscale Investment’s application to convert its flagship Grayscale Bitcoin Trust into a spot bitcoin ETF.
While the SEC has approved multiple applications to establish futures-based bitcoin ETFs, which are trade agreements to be carried out at a future date and price, the regulator has stated that spot bitcoin ETFs are vulnerable to “fraudulent and manipulative conduct.”
Grayscale responded to that argument on January 13th. According to the report, “a successful manipulation of prices in the spot bitcoin market would necessarily affect the price of bitcoin futures as well – and, thus, the value of bitcoin futures ETPs’ holdings.” Grayscale referred to the SEC’s reasoning as “illogical.”
Grayscale also accused the SEC of exceeding its statutory authority, claiming that the agency “is not permitted to decide whether certain investments have merit for investors.”
Grayscale Chief Legal Officer Craig Salm said in a separate blog post that final briefs on the case are due Feb. 3, after which three judges will be selected and the court will share a schedule for the lawsuit’s oral arguments. He also stated that a final decision on the case could be reached by the fall.
(With inputs from Shikha Singh)
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