The SEC is seeking to block a complaint from Greyscale Investments after it rejected a proposed Bitcoin exchange.
The United States Securities and Exchange Commission (SEC) is doing more to stop Grayscale Investments’ attempt to launch Bitcoin (BTC) $17,475 Exchange-traded funds (ETFs). Grayscale launched its legal challenge to the SEC’s denial process of the proposed investment product in June 2022. A 73-page brief was filed in the United States Court of Appeals for the District of Columbia Circuit on Dec. 9 saw the SEC laid down for its first decision to block Grayscale’s request to convert its Bitcoin Trust into a Bitcoin spot ETF. The SEC is asking the D.C. Circuit to dismiss Grayscale’s complaint, which says the proposed fund differs from futures ETFs it has supported in the past.
Grayscale argues that the SEC’s unapproved rules violated the regulatory framework, the guidelines by which US federal agencies develop and issue regulations. The investment fund cited previous SEC approval to list and trade Bitcoin futures.
The SEC disputed the issue, noting that the previously approved products only had trading contracts traded on the Chicago Mercantile Exchange (CME). The exchange is a registrant of the Commodity Futures Trading Commission (CFTC) and operates under “strict supervision,” according to the SEC.
The regulator believes that the Bitcoin financial market is isolated and unregulated compared to other investment vehicles. He argues that Grayscale did not support the argument that the CME in charge of futures trading will “find out that it is sufficient to prevent fraud and fraud targeting the Bitcoin spot market.”
Meanwhile, Grayscale argues that the SEC failed to justify its separate treatment of Bitcoin Futures and Bitcoin exchange-traded funds. The fund argued that these products directly follow the price of BTC and called the regulatory authorities discriminatory and harmful to investors. The Grayscale Bitcoin Trust has been operating since 2013 and provides investors with the opportunity to invest in the hands of the fund.
The fund invests in BTC, giving investors exposure to cryptocurrency in a secure manner, without directly accessing, managing, and storing BTC. Grayscale has been trying to convert the money into an ETF since 2016. It reiterated its reasoning behind starting its legal tussle with the SEC, saying that the ETF would provide greater access to BTC and increase investor protection. strong.
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