December 6, 2023

As governments around the world Some digital asset managers continue to pursue the cryptocurrency industry, resisting regulators in an effort to provide more legal investment opportunities.

US Securities and Exchange Commission on Wednesday unacceptable Grayscale Investments converts Bitcoin Credit (GBTC) into an Exchange Traded Fund (ETF). Shortly thereafter, the company – one of the largest digital asset managers, with around $20 billion in assets under management – submitted an application lawsuit against the SEC.

Securities and Exchange Commission also to reject Bitwise Asset Management app to get Bitcoin ETF on that day.

The SEC’s decisions are not the first in this field; The government agency has denied over a dozen bitcoin ETFs in the past year alone while approving several bitcoin-based ETFs in the future.

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“Spot bitcoin ETFs trade based on the price of bitcoin itself, while futures-based ETFs trade based on the price of a bitcoin futures product on the Chicago Mercantile Exchange, which in turn correlates with an index,” Ken Goodwin, director of regulatory and institutional affairs at Blockchain Intelligence Group, for TechCrunch. Proponents of Bitcoin ETFs argue that futures markets are still dependent on the underlying spot price of Bitcoin, while the SEC notes that the CME futures market is regulated by [Commodity Futures Trading Commission]. “

The Securities and Exchange Commission (SEC) allows traders to bet the value of bitcoin through CME’s bitcoin futures contracts, a US dollar cash settlement contract That serves as a one-time-a-day reference rate for the value of bitcoin in US dollars, according to global markets firm CME Group.

Craig Salem, Grayscale’s chief legal officer, said on Twitter spaces The SEC once denied both bitcoin futures and ETFs, at least, that it was “fairly treated.”

But that was in 2017.

Recently, the Securities and Exchange Commission (SEC) continued to approve both long and short-term bitcoin futures ETFs while denying spot bitcoin ETFs coming to market, according to Michael Sonnenchin, CEO at Grayscale Investments. , for TechCrunch. “This differentiated treatment is in fact one of the most important arguments underpinning our advocacy.”

Since the defendant in the case is structured, he will go to the appeals court and the decision should be completed within nine to 12 months, Sonninchin said. Reuters.

Goodwin said the SEC’s rejection points to concerns about market manipulation and the lack of a watch-sharing agreement between a “large-volume regulated market” and a regulated exchange. “This reflects the concerns that the regulator has expressed for years regarding the rejection of other Bitcoin ETF applications.”

GBTC owns 3.5% of all bitcoin in circulation, and its shares are the largest and most liquid exchange-traded cryptocurrency product, writes Ryan Selkis, founder and CEO of Messari, in Report. “Greyscale products are like ETFs, but they are not In fact ETFs,” Selkis wrote.

“It is quite clear that the SEC will not simply approve a bitcoin spot ETF until it has regulatory oversight of crypto exchanges,” Nate Geracci, head of the ETF Store, told TechCrunch. “Even with the specter of a Grayscale lawsuit being filed — a lawsuit that appears to have at least some validity — the SEC has not relentlessly denied my bitcoin ETF deposits.”

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