Grayscale’s digital currency asset manager is in a legal battle with the U.S. Securities and Exchange Commission over the latest rejection of funds traded on the company’s spot bitcoin exchange.
Last Wednesday, the SEC rejected Grayscale’s application to convert bitcoin trusts to spot ETFs. The company filed lawsuit on the same day.
Grayscale Bitcoin Trust, by ticker GBTCis the largest bitcoin fund in the world.
“We’re just asking the SEC to keep this product to a higher standard, to give greater investor protection and provide greater risk disclosure to investors,” Grayscale CEO Michael Sonnenshein told CNBC.ETF Edge“Wednesday of this week.” The conversion will unlock billions of dollars of unrealized shareholder value. “
He identified the capricious potential treatment by the SEC, which allows bitcoin futures products to trade under certain rules and regulations but rejects equal opportunity point products.
“The inconsistent treatment here by the SEC – allowing futures products to be traded but denying spot products to trade – doesn’t see why there is a fair market through a lens like here,” Sonnenshein said. “In fact, the treatment is quite different.”
Todd Rosenbluth of VettaFi, a financial services company, joined the conversation to share his thoughts on what could change the SEC’s perspective. The commission distinguishes between futures and point -based products, citing related regulations bitcoin ETFs are based on futures.
“I want Michael [Sonnenshein] best in lawsuits, but it’s hard to convince the SEC that there won’t be fraud and manipulation when it’s explicitly asked of asset managers to challenge it time and time again, ”VettaFi’s head of research said.
Markets in Canada, Brazil and parts of Europe show promise for spot bitcoin ETFs, according to Sonnenshein. Instead of bringing ETF candidates to the international market directly, Grayscale’s CEO hopes to fix cryptocurrency regulation internally.
“What we’re going to look at, and what we’re going to look at, is working proactively with the SEC and other regulators here in the U.S. to respond to White House executive messages from earlier this year to engage with crypto issues and eventually develop a regulatory framework that creates that treatment. consistent and developing a framework that can allow businesses to grow and not undermine innovation in the U.S. as it relates to crypto, ”Sonnenshein said.
Grayscale Bitcoin Trust trading takes place on a variety of stock exchanges. However, it is down more than 50% over the past 52 weeks.
The SEC declined to comment beyond the order denying Grayscale’s application.