The Securities and Exchange Commission has reaffirmed its decision to reject Grayscale’s application for a Bitcoin exchange-traded fund (ETF).
The federal regulator reiterated that it believes such products are prone to fraud and manipulation. It had previously rejected Grayscale’s proposal to convert its Bitcoin Trust into an ETF in June earlier this year.
Grayscale Sues the SEC
Grayscale argued that the SEC was discriminating against ETFs investing in spot Bitcoin. Upon receiving the rejection, Grayscale sued the SEC. It claimed the regulator was applying an unfair double standard by allowing exclusively Bitcoin futures ETFs on the market.
Grayscale says the SEC violated the Administrative Procedure Act and the Securities Exchange Act of 1934. It further accused the commission of discriminating between issuers of the two types of ETFs on an “arbitrary and capricious” basis. Grayscale added that by creating this…
