Grayscale Criticizes US SEC Over Discrimination in Lawsuit
Grayscale is the largest crypto asset manager in the world. It has recently come out to criticize the US Security and Exchange Commission. Grayscale accused the Commission of discrimination over the rejection of its spot Bitcoin ETF application.
Grayscale’s Desired Switch
Grayscale is working to convert its Bitcoin Trust (GBTC) worth $12 billion into spot Bitcoin ETF. The US SEC has, however, rejected the firm’s proposal. The Commission claims it carries a risk of fraud and other manipulations from the market.
Grayscale, in its argument, said the US SEC is discriminatory and capricious. The statement referred to the SEC’s assessment of the market and spot Bitcoin. Whereas, the regulator allows futures Bitcoin ETF while they both carry similar conditions.
Grayscale filed a lawsuit against the Exchange Commission. The firm argued therein that the SEC is inconsistent with the test it applies. Grayscale said the SEC has a harshness against spot Bitcoin ETF that it doesn’t demonstrate elsewhere.
Grayscale decided to take the legal course against the US SEC. It sued the regulator in the middle of this year. The Bitcoin Trust of Grayscale is trading at a 25% discount currently in the market.
The low price means searching for Bitcoin exposure through Grayscale might cost only $12,500. Meaning 25% off the current wider market value. The shift will enable the closure of the fund’s net asset value.
Maybe Another Bull Run?
The US SEC has also, recently, turned down another spot Bitcoin ETF proposal. This time, it is from WisdomTree.
The SEC finally rejected it on the 11th of October. This followed initial rollovers of the decision first in March and then August.
The Security and Exchange Commission cited the same reasons it mentioned against Grayscale. They are potential frauds and spot Bitcoin market manipulation.
Note that the Bitcoin community has been on the side while expecting a spot Bitcoin ETF. The hope is that such would drive more institutional adoption. But, on the other hand, the US SEC is refusing to shift ground.
Nevertheless, institutions keep on moving and find other means of getting Bitcoin exposure. It seems it might require another bullish run before the SEC gets okay with a spot Bitcoin ETF.
The Bitcoin market is fighting hard against macroeconomic factors. Stock market slides are taking a huge toll on the wider crypto community.
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