SEC Spot ETF Denial ‘Arbitrarily,’ Grayscale Lawyer Says

Grayscale Bitcoin Trust: Lawyers representing Grayscale opened the argument, saying the SEC had contradicted its own previous orders when it comes to approving the GBTC spot Bitcoin ETF. Don Verrilli, the firm’s attorney, said the SEC’s rejection was an arbitrary decision given the existence of Bitcoin futures contracts. In response to the opening arguments, the judge asked whether the SEC should approve a spot Bitcoin exchange traded product (ETP) if Grayscale’s arguments are to be preferred.

Oral arguments began in Grayscale’s lawsuit against the Securities and Exchange Commission’s decision to deny its application to convert Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. Arguments in the lawsuit were heard before the District of Columbia Court of Appeals. Grayscale’s argument in the case was based on allegations that the SEC violated the Administrative Procedure Act and the Securities Exchange Act. By doing so, the company argues, the SEC was unfair to Grayscale after it approved the futures ETF.

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The denial

The clash began in June 2022, when the US Securities and Exchange Commission (SEC) rejected the spot ETF application. In a latest development, Alameda Research, a subsidiary of crypto exchange FTX, filed a lawsuit against Grayscale a day before oral arguments began in the SEC Vs Grayscale case. The Alameda lawsuit alleged that the company charged unreasonable management fees for operating and managing the GBTC and Ethereum Trusts.

On Monday, Grayscale Bitcoin Trust (GBTC) share price closed up 4.62%, a sign of confidence in the company’s stance in the lawsuit. The company’s attorneys said the case rests on the SEC handling its filing differently.

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Anvesh reports major developments around crypto adoption and trading opportunities. He has been associated with the industry since 2016 and is now a strong advocate for decentralized technologies. Anvesh is currently based in India. Follow Anvesh on Twitter at @BitcoinReddy and contact him at [email protected]

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