The United States securities watchdog (on Wednesday) prohibited Grayscale’s spot BTC exchange-traded fund. Grayscale is among the world’s leading digital assets managers.
Meanwhile, it reacted to the SEC’s decision with a lawsuit. However, the legal challenge is one of the latest in several proposal rejections for the United States listing of spot BTC ETFs within the previous year.
The US Securities & Exchange Commission stated that the application to accept the ETF didn’t meet goals set to curb manipulative and fraudulent practices and protect the public and investor interest.
Grayscale suggested creating the exchange-traded fund as a conversation of the GBTC.PK (Grayscale Bitcoin Trust). Meanwhile, Intercontinental Exchange Inc. owns NYSE Arca.
The SEC reiterated its rejection didn’t rest on assessing whether BTC or the overall blockchain technology boasts value or utility as an investment or an innovation.
Meanwhile, Grayscale confirmed responding by filing a suit against the watchdog. Moreover, the asset manager would argue the US SEC had dishonored the Administrative Procedure Acts & Securities Exchange Act.
Also, it suggested that SEC bases its ETFs approval on BTC futures. Grayscale argues that regulators accepting ETFs with derivatives of an asset should logically allow exchange-traded funds that hold the same product.
The US Securities Exchange and Commission rejected multiple applications for spot BTC exchange-traded funds within the previous year. The regulator concentrated on the absence of surveillance-sharing agreements with a notable market correlated with the underlying asset.
Bitcoin, the world’s leading crypto, hovers around 70% down from the November all-time high at $69K. Most cryptos and crypto-connects stocks have plummeted recently, with investors dumping risky assets following soaring inflation and monetary policy tightening by leading central banks.
Other spot BTC ETFs issuers that faced SEC rejection in recent months included Valkyrie, SkyBridge, and Fidelity. All wanted to ensure easy Bitcoin exposure to the masses. Proponents trust the ETH authorization would guarantee easy and low-cost access for institutions and individuals to invest in $BTC.
Nevertheless, Grayscale confirmed readying for all potential outcomes. Moreover, it beefed up its legal aids as it awaits the decision. Grayscale remains dedicated to exchanging the product.
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