- Grayscale has jumped the gun and called the SEC for a meeting.
- The Trust maintains its ETF application shouldn’t be delayed.
- All eyes are on the SEC to see the commission’s reaction.
Gears have shifted in the race to secure a spot Bitcoin ETF approval in the U.S., with Grayscale Bitcoin Trust pressing the Securities and Exchange Commission (SEC) to convene a meeting to discuss the next steps in converting its exchange-traded product (ETP).
An appellate court for the District of Columbia Circuit vacated SEC’s decision to reject Grayscale’s ETF application on August 29, citing an inadequate explanation for the rejection and an unfair regulatory treatment.
No Available Rationale to Delay Grayscale’s Application
In a letter dated September 5 and addressed to the Director of SEC’s Division of Trading and Markets, Grayscale lawyers noted that the commission has no rationale to distinguish a Bitcoin futures ETP from a spot Bitcoin ETP under the legal analysis it previously adopted in rejecting spot Bitcoin ETPs.
Per SEC’s provision, an exchange listing Bitcoin-based ETP meets its obligations under the Exchange Act Section 6 (b)(5) if it demonstrates having a comprehensive surveillance-sharing agreement with a regulated market of a significant size related to the underlying Bitcoin assets.
In the August 29 ruling, the appellate court unequivocally determined that Grayscale’s application met this threshold.
Securing Investor Interest
Grayscale lawyers have urged the commission to pay attention to several matters ahead of a possible meeting with the Trust, including that investors continue to bear unjustifiable harm with each day that passes without Grayscale’s shares being listed on NYSE.
The Trust also wants the commission to acknowledge that it is denying its investors a chance to access regulated Bitcoin investment products.
Grayscale noted that following the appellate court’s decision on its ETF application, ProShares Bitcoin Strategy ETF netted investment inflows of over 800% above its daily average, arguing that it would have attracted a sizeable portion of this investment if its application wasn’t pending.
Read why Coinbase director believes the SEC won’t be rushed into expediting spot Bitcoin ETF approvals:
Former Coinbase Director Dampens Hopes for BTC ETF Approval
Stay updated on why Bitwise withdrew its Bitcoin and Ethereum ETF application:
Bitwise Withdraws Bitcoin and Ethereum ETF Application