Grayscale sues SEC over refusal to convert GBTC to ETF

Grayscale sues SEC over refusal to convert GBTC to ETF

Grayscale sued the SEC for refusing to convert GBTC to ETF

Grayscale Investments initiated a lawsuit against the US Securities and Exchange Commission (SEC) after being rejected by the regulator requests to convert a GBTC trust to a bitcoin ETF.

The regulator justified the verdict by not meeting the requirements for “preventing fraudulent and manipulative actions […], as well as protecting investors and the public interest.”

Earlier, the company indicated that the SEC was ready to approve bitcoin-ETF based on futures with the rejection of applications for based on its spot variant may violate the Administrative Procedure Act.

“Bitcoin futures-ETP< em>under the [Investment Companies] Act of 1940 and Bitcoin Spot ETPs, which do not require such registration, are similar to each other in all relevant respects. However, relying on the November 12, 2021 rejection order [of VanEck's filing], the Commission will interpret them differently”, the letter stated.

If the SEC did not see market manipulation in the futures market, it can be concluded that the spot market also satisfies this criterion to a sufficient extent, the company said at the time.

“We are deeply disappointed and strongly disagree with the SEC’s decision to continue to ban spot Bitcoin ETFs from entering the US market,”Grayscale said in a press release following the SEC decision.

СEO Michael Sonnenschein promised to “use all the resources of the company to protect the interests of investors and fairly regulate investment instruments in the first cryptocurrency.”

The head of the firm allowed this possibility for the first time in March 2022.

At Grayscale emphasized that during the consideration by the SEC, the conversion of GBTC into an ETF was supported by 99.9% of those who left one of 11,400 comments.

Recall that the SEC has not yet approved any application to launch a spot bitcoin -ETF.

Grayscale Investments filed an application to convert a digital gold-based trust into a spot bitcoin ETF on October 19, 2021.

December 17, the SEC delayed a decision on Grayscale Investments' application. In February, the Commission took this step again.

Earlier, the GBTC discount exceeded 34%.

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