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Traders and candidates interested by spot Bitcoin exchange-traded funds (ETFs) are protecting an in depth eye on the continued court docket case between Grayscale and the U.S. Securities and Trade Fee (SEC
On June 29, 2022, the U.S. SEC rejected Grayscale’s software to transform the Grayscale Bitcoin Belief to a spot Bitcoin ETF. The identical day, Grayscale filed an enchantment in D.C. court docket difficult the SEC’s determination.
The court docket’s determination on the lawsuit may dictate the destiny of the string of spot Bitcoin ETF functions filed final month.
Grayscale claims the SEC acted “arbitrarily and capriciously”
The crux of Grayscale’s argument is that the SEC acted “arbitrarily and capriciously” in rejecting spot Bitcoin ETF functions, particularly contemplating it had already permitted Bitcoin futures ETFs. The SEC violated the Securities Trade Act with its “unfair discrimination” towards spot Bitcoin ETF issuers, Grayscale alleges.
In different phrases, Grayscale believes that the spot and futures Bitcoin ETFs pose related dangers and ought to be handled equally. Furthermore, each spot and Bitcoin futures ETFs are priced based mostly on the identical underlying spot markets — one more reason why they need to be handled equally, Grayscale argues.
Grayscale delivered its last oral arguments within the case on March 7. The SEC that day argued that spot and Bitcoin futures ETFs have a correlation, however that correlation doesn’t equate to causation. The crux of the SEC’s argument is that spot Bitcoin ETFs are extra susceptible to manipulation and fraud as a result of the underlying spot market stays unregulated. Nevertheless, the regulated Chicago Mercantile Trade, the place Bitcoin futures ETFs commerce, has adequate safeguards towards fraud and manipulation.
Wanting ahead
The court docket determination, whatever the final result, will likely be essential for all these trying to situation spot Bitcoin ETFs within the U.S. If Grayscale wins, the SEC may enchantment the choice in the next court docket. If Grayscale loses, the agency may name for an “en banc” listening to, which is uncommon — in such hearings, all judges of the D.C. Circuit will weigh in on the case. Or, Grayscale may enchantment the choice within the Supreme Courtroom.
On condition that many market analysts are optimistic concerning the approval of spot Bitcoin ETF functions, the court docket ruling, on this case, may considerably affect the outlook for such ETF issuers.
The submit Courtroom determination on Grayscale v. SEC lawsuit may show essential for spot Bitcoin ETF candidates appeared first on CryptoSlate.
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