Lawyers Criticize SEC Over Approval of Leveraged Bitcoin ETF
Date: 2023-07-13 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
Lawyers for asset management firm Grayscale have criticized the U.S. Securities and Exchange Commission (SEC) for allowing the launch of the first leveraged bitcoin exchange-traded fund, while rejecting previous motions to create a spot fund.
For most of the year, the asset manager has been embroiled in a lawsuit against the Securities and Exchange Commission (SEC), which he accuses of being unfair and arbitrary in the approval process. Grayscale sued the SEC last June after the agency rejected an application to convert the Grayscale Bitcoin Trust (GBTC) into an ETF on the spot market.
Now, Grayscale lawyer Donald Verrilli said the leveraged bitcoin ETF is an "even riskier investment product" in a letter sent Monday to the U.S. Court of Appeals for the District of Columbia.
"The fact that the Commission has authorized leveraged bitcoin futures ETPs to start trading demonstrates that the Commission continues to arbitrarily treat spot bitcoin ETPs differently than bitcoin futures ETPs," Verrilli noted.
In June, many financial market giants resumed applications for a spot bitcoin ETF. First, investment giant BlackRock applied for a spot bitcoin trust. Then similar applications were submitted by other organizations, including Bitwise and Invesco.
Late last month, the SEC told the Nasdaq and Cboe exchanges that recent applications for spot bitcoin ETFs were not "clear and comprehensive." . According to the regulator, the companies did not provide the necessary information on how the data will be exchanged. Moreover, none of the applications met the standards designed to prevent fraud and manipulation and protect investors and the public interest.
However, the former head of the SEC, Jay Clayton, unexpectedly changed his mind about the spot bitcoin ETF. He noted that it is difficult for regulators to refuse applications for a spot bitcoin ETF if market participants who submit applications to the SEC to launch such a tool can demonstrate its effectiveness.
