Grayscale Investments has responded to the US Securities and Exchange Commission (SEC) for its recent rejection of VanEck’s spot Bitcoin ETF implementation.
The operator Grayscale Bitcoin Trust (GBTC) sent a letter to SEC Secretary Vanessa Countryman on Monday claiming that the SEC was wrong in rejecting bitcoin spot ETFs, as it has now approved three bitcoin futures ETFs, one of which is from VanEck. and Valkyrie and ProShares.
Grayscale argues that the SEC “has no reason to say that investing in derivatives of an asset is acceptable to investors, while investing in the asset itself is not.”
He claims that the Securities and Exchange Commission violated the Administrative Protection Act (APA) by not using the same transaction to Bitcoin ETF manufacturers.
The Bitcoin Futures ETF allows traders to speculate on the future price of Bitcoin (BTC) through derivatives, while the Bitcoin spot ETF allows traders to trade at the current price of the asset, and works in the same way as holding the asset.
Grayscale will hardly be an uninterested party with an October application for GBTC to be included in bitcoin spot ETFs that can be dissolved as it is on Christmas Eve. On November 12, the Securities and Exchange Commission rejected a similar application from Vanek on the grounds that he had not complied with the requirements of the Stock Exchange Act of 1934 (the Stock Exchange Act).
Shades of gray contrasts with these reasons for rejection.
“We believe that this rationale has failed to address significant regulatory and competitive developments since 2017, when the Commission first reviewed and rejected National Exchange’s application to list and trade Bitcoin ETP spot shares.”
By approving bitcoin futures ETFs, Grayscale believes that the SEC has allowed applicants to circumvent the requirements of Section 6 (5) (b) of the Exchange Act that bitcoin ETF applicants must comply with.
Section 6 (5) (b) is designed to “protect investors and the public interest” by preventing fraud, market manipulation and “unfair discrimination among customers, issuers, intermediaries or sellers.”
Related: Invesco launches Spot Bitcoin ETP on Deutsche Borse
Grayscale has predicted that the Bitcoin ETF will be listed as early as July 2022, but it is unclear whether this prediction will come true.
GBTC manages approximately $ 37.1 billion in assets with 692,370,100 shares.