Grayscale, a prominent crypto asset manager, has taken proactive steps following a recent court ruling. Its legal representatives from law firms Davis Polk and Munger Tolles & Olson have dispatched a letter to the US Securities Exchange Commission (SEC), urging the federal agency to progress with Grayscale’s proposed Spot Bitcoin ETF. They’ve also expressed a desire for an immediate meeting with the SEC staff.
This move comes in the wake of a pivotal decision by the US Court of Appeals for the D.C Circuit. The court determined that the SEC had inappropriately declined Grayscale’s proposal for a spot Bitcoin ETF, noting that the agency failed to provide sufficient justification for its decision.
In a win for Grayscale, the court instructed the SEC to re-evaluate the application submitted by the crypto asset manager. However, the ball remains in the SEC’s court, as it retains the right to contest the court’s verdict.
Grayscale’s Lawyer Calls Out Inconsistencies in SEC’s Approach
Grayscale’s representative, Joseph Hall of Davis Polk, voiced concerns over the SEC’s perceived inconsistency in its treatment of Bitcoin ETFs. In a letter dispatched to the SEC, Hall stated:
“We believe the commission should conclude that there are no grounds for treating the trust differently from ETPs [exchange-traded products] that invest in Bitcoin futures contracts.”
In essence, Grayscale’s argument hinges on the fact that their proposed spot Bitcoin ETF intends to employ the same market surveillance measures with the Chicago Mercantile Exchange (CME) that the SEC had previously sanctioned for Bitcoin futures ETFs.
Joseph Hall further emphasized the urgency of the matter, pointing out that if there existed a compelling rationale to distinguish spot Bitcoin ETPs from Bitcoin Future ETPs, it would have been identified by this juncture. Thus, he is urging the SEC to expedite their decision-making process.
Lawyer Claims Delaying Spot Bitcoin ETF Approval Would Harm Investors
Grayscale has communicated a sense of urgency in their plea to the SEC regarding the approval of the spot Bitcoin ETF, emphasizing that further delays could detrimentally affect investors.
In concluding the letter, Joseph Hall asserted, “We believe the trust’s nearly one million investors deserve this fair playing field as quickly as possible.” He argued that American investors are currently navigating through more complex “product structures that are less streamlined and more intricate” as opposed to the direct nature of spot Bitcoin ETFs. Hall highlighted the substantial flow of investments into Bitcoin futures ETFs in the aftermath of the court’s favorable decision last week as evidence of this.
Providing an external perspective on the matter, Felix Shipkevich, the head of New York-based law firm Shipkevich PLLC, shared his insights with CryptoNews. He expressed skepticism over the possibility of the SEC challenging the court’s decision and seemed optimistic that a spot Bitcoin ETF will likely receive approval in the near future.
