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Grayscale Investments has urged the Securities and Exchange Commission (SEC) to reconsider its ruling regarding the transformation of the Grayscale Bitcoin Trust into an Exchange-Traded Fund (ETF). This request follows the U.S. Court of Appeals for the D.C. Circuit’s reversal of the SEC’s previous rejection on August 29.
Importantly, a statement from Davis Polk on behalf of Grayscale asserts that the SEC should not find justification to differentiate the Grayscale Bitcoin Trust from current Exchange-Traded Products (ETPs) that invest in Bitcoin futures. Given the SEC’s history of denying spot ETF applications, the legal team argues that any significant distinction between spot and futures-based Bitcoin ETFs would have been evident by this point.
Grayscale further asserts that their proposed Bitcoin ETF aligns with the SEC’s requirements for surveillance-sharing agreements with regulated markets. They claim their ETF is “materially similar, across relevant regulatory factors, to the approved Bitcoin futures ETPs.” Consequently, Grayscale maintains that it fulfills the complete surveillance-sharing agreement criteria, relying on analogous agreements with the Chicago Mercantile Exchange (CME) to identify fraudulent activities.
Additionally, the legal team highlighted the strong correlation between Bitcoin’s underlying assets and futures, indicating that regulators should regard both in a similar manner.
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Nonetheless, the letter reveals a concerning lack of dialogue between the SEC and Grayscale since the court ruling just over a week ago. Grayscale has repeatedly sought the SEC’s involvement in discussing the next steps, underscoring the agency’s apparent delays. CEO Michael Sonnenshein voiced his dissatisfaction on Twitter, committing to ongoing communication with the SEC.
Scott Johnsson, a finance attorney at Davis Polk, noted that the SEC is facing increased pressure to approve Grayscale’s application. “I expect the SEC to face the music absent truly deranged decision-making,” he remarked.
Bloomberg analyst James Seyffart succinctly summarized Grayscale’s message to the SEC: “Grayscale’s letter to the SEC can be summed up as: ‘Yo, what’s good?'” ‘Please call us back.'”
While Grayscale’s optimism is evident, it is crucial to recognize that the court’s ruling only mandates a review of the SEC’s denial, not its endorsement. Consequently, the crypto community and investors are keenly anticipating the SEC’s reply.
Bitcoin is trading at $26,766, adding further urgency to this critical confrontation.
The post Grayscale Pressures SEC for Bitcoin ETF Approval Following Court Ruling appeared first on BitcoinWorld.
