WASHINGTON (Reuters) – Grayscale Investments, a crypto asset manager, has urged the U.S. Securities and Exchange Commission (SEC) to expedite the approval of its proposed exchange-traded fund (ETF) that would track bitcoin. This comes after the company won a court battle against the agency.
Last week, a three-judge panel of the District of Columbia Court of Appeals in Washington ruled that the SEC was wrong to reject Grayscale’s bitcoin ETF proposal without providing a clear explanation for its decision. This case has been closely monitored by the industry and caused a brief increase in the price of bitcoin by nearly 7%.
As a result of the ruling, the SEC is required to review Grayscale’s application. However, the agency still has the option to appeal the court’s decision. The SEC stated last week that it was studying the ruling.
Grayscale’s law firm, DavisPolk, submitted a letter to the SEC on Tuesday, stating, “We hope you will agree that the best use of resources now is for the (SEC) to issue an order approving” the product.
A spot bitcoin ETF would provide investors with exposure to the largest cryptocurrency in the world without the need to own it. So far, the SEC has rejected all spot bitcoin ETF applications, citing concerns about investor protection against market manipulation.
However, the SEC has approved bitcoin futures ETFs based on a market surveillance arrangement with the Chicago Mercantile Exchange, which is where most bitcoin futures trade. Grayscale argued that the same arrangement should be sufficient for its spot ETF, as both products rely on bitcoin’s underlying price.
The appeals court concluded that the SEC denied Grayscale’s application without valid justification, as it failed to explain why the two types of arrangements were materially different. DavisPolk stated, “If any other reason could be offered in attempting to differentiate” the two types of products “we are confident that it would have surfaced by now.”
Reporting by Michelle Price; Editing by Tomasz Janowski
Credit: The Star : Tech Feed
