The Securities and Exchange Commission has been accused of delaying spot ETF applications time and again. However, one applicant namely Grayscale has taken the matter to the court. It is worth mentioning that Grayscale is the largest Bitcoin Trust and holdings in the world.
The firm has plans to transition into a Bitcoin ETF since last year. However, the plans have been pushed back on account of a delay in approval by the Securities and Exchange Commission.
The latest development in the case of Grayscale versus the SEC suggests that the winning chances are leaning in favor of the former. To this end, Bloomberg analyst Elliot Stein has recently talked about during a podcast appearance hosted by Lauren Shin.
Stein shared the highlights from the last court hearing of this case. During this hearing, the prosecution asserted in the court that SEC has no legal precedence for delaying Spot ETF applications while accepting the futures ETF requests for Bitcoin.
As per Stein, Grayscale attorneys have argued that the legal nature of underlying assets for both futures and spot ETF applications are the same. Therefore, SEC is ought to process both ETF applications in the same manner.
However, SEC’s conduct has been favorable towards one and reductive regarding the other. The lawyers of the SEC have thus called the conduct by SEC arbitrary and prone to the violation of Federal Laws.
Meanwhile, SEC has countered these assertions by claiming that SEC has treated both types of applicants in the same manner. However, Futures ETFs and Spot ETFs are very different. The regulatory agency noted that futures ETFs are regulated by CFTC while spot ETFs are under the supervision of the SEC.
Therefore, the agency should be absolved from any allegation of discrimination. Stein commented that before this hearing SEC had an edge over Grayscale since courts lean towards the agencies that are considered to be the experts in their respective fields.
Grayscale’s Application for Bitcoin Spot ETF
Stein mentioned that as soon as Grayscale wins the lawsuit, it is likely that their spot ETF application is sent back to SEC for review. The analyst noted that the outcome of this ruling will be a deciding factor in the future of the Bitcoin spot ETF application.
On the other hand, in case Grayscale does not claim a victory the futures ETF contracts may also get revoked due to the new legal precedent.
Talking about other cryptocurrency-related cases that are extended by SEC, Stein explained that their outcome can play an important role in shaping the future of cryptocurrency regulations in the USA.
She also discussed Ripple Labs’ unregistered securities lawsuit and the matter concerning Coinbase employee Ishan Wahi who is facing allegations of unregistered securities against 9 crypto variants. She also talked about the Terraform Labs case where the SEC might be trying to set legal precedence for the treatment of stablecoins.
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