Grayscale called on the U.S. SEC to approve its application for a spot Bitcoin exchange-traded fund (ETF), arguing that further delays would harm investors.
Grayscale’s lawyers sent a letter to the SEC on September 5, seeking a meeting with the securities regulator regarding the progress of the spot Bitcoin ETF approval. In the letter, the lawyers stated that the SEC’s review of Grayscale’s application took nearly three times longer than the time allowed by securities laws.
The lawyers said there was no reason for the commission to treat a spot bitcoin ETF differently from a futures-based bitcoin ETF. Grayscale urged regulators to “move quickly” to greenlight its application as it prepares to launch its product.
“But now that the Court of Appeals has spoken, there is no available rationale for distinguishing the Bitcoin futures ETP from the spot Bitcoin ETP based on the legal analysis the Commission previously employed in rejecting the spot Bitcoin ETP.”
Grayscale submits to SEC
Furthermore, the lawyers stated, “If any additional reason could be provided to attempt to distinguish between a spot bitcoin ETP and a bitcoin futures ETP…we believe it would have surfaced by now.”
The SEC has consistently rejected spot Bitcoin ETF applications because applicants have not shown how they will adequately protect investors from market manipulation and fraud.
Investors prefer spot Bitcoin ETFs
Meanwhile, the latest developments come shortly after a three-judge panel in Washington overturned the SEC’s decision to reject Grayscale’s application to convert its GBTC into an ETF. While the ruling means the regulator must take another look at Grayscale’s application, the commission has time to appeal the decision.
Grayscale’s lawyers said U.S. investors prefer spot bitcoin ETFs, adding that they should not be “forced into adopting less efficient and more complex product structures simply because these are the only types of products that have not yet received Commission approval.” The letter claims that the SEC’s continued delays are harming investors’ interests.
The letter also noted that the company continues to face increased competition from other applicants, mentioning the recent influx of several spot Bitcoin ETF applications.
Grayscale maintains that the SEC cannot impose additional requirements on a spot bitcoin ETF, with a recent court ruling noting that the company’s proposed product is similar to an existing futures bitcoin ETF, including that both products have the same supervisory-sharing agreement with the Chicago Mercantile Exchange.
The U.S. Securities and Exchange Commission (SEC) recently delayed its decision on six spot Bitcoin ETF applications from BlackRock, Fidelity, VanEck, Invesco, WisdomTree, and Fidelity by 45 days, giving the commission until October to reject or approve the applications, or further delay its decision.
