Grayscale Investments has announced its intention to initiate discussions with the Securities and Exchange Commission (SEC). The company is urging the regulatory agency to approve the transformation of its Grayscale Bitcoin Trust into an exchange-traded fund (ETF) with a specific focus on spot bitcoin.
In a letter addressed to the SEC, Grayscale legal team have presented a strong case for the approval of NYSE Arca’s Rule 19b-4 filing. They are urging SEC staff to collaborate with Grayscale and NYSE Arca to speed up the Trust’s share listing. Their argument revolves around ensuring nearly one million Trust investors get a fair and timely chance to participate.
Additionally, the court has instructed the SEC to reassess Grayscale’s request for a spot bitcoin ETF. This follows Grayscale’s previous legal action against the SEC when it rejected the proposal to convert its flagship GBTC fund.
Grayscale Legal Team Challenges SEC’s Differential Treatment of Bitcoin Investments
The court’s ruling centered on SEC’s unequal treatment of spot bitcoin ETFs compared to approved funds based on futures contracts. Following the court’s ruling, Grayscale’s team contends that no valid reasons exist for treating their trust differently from futures ETFs. They believe both should be treated equally.
They argue that if there was a valid reason to differentiate spot bitcoin ETPs from bitcoin futures ETPs, it should have been apparent in one of the fifteen previous SEC orders. These orders rejected spot bitcoin Rule 19b-4 filings, even after bitcoin futures ETPs began trading.
SEC’s Recent Court Ruling Sparks Hope for Spot Bitcoin ETF Approval
The SEC has not approved a spot bitcoin ETF yet. However, the recent court ruling may offer hope for several firms. These firms, including industry giants like BlackRock and Fidelity, have submitted applications for spot bitcoin ETFs in recent months.
Experts have suggested that the SEC may opt for an en banc hearing within the next 45 days, potentially leading to a rehearing. Alternatively, the SEC could pursue a review of the judges’ decision in the Supreme Court and may explore alternative grounds for denying the ETF proposals.
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