SEC rejects Grayscale bitcoin ETF application. Grayscale sues SEC

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Grayscale sues U.S. SEC for rejecting its bitcoin ETF application
By Akriti Sharma and John Mccrank
June 30, 2022

(Reuters) - Grayscale Investments said on Wednesday it had sued the U.S. Securities and Exchange Commission after the regulator rejected the digital asset manager's proposal to list a spot bitcoin exchange-traded fund (ETF).

The SEC had said Grayscale's proposal to list the ETF did not meet the standard designed to prevent fraudulent practices and protect investors. (https://bit.ly/3yw4Nko)

"If regulators are comfortable with ETFs that hold derivatives of a given asset, they should logically be comfortable with ETFs that hold that same asset," Grayscale said, referring to the SEC's approval of ETFs based on bitcoin futures.

Grayscale, one of the world's biggest digital asset managers, had proposed creating the ETF as a conversion of its Grayscale Bitcoin Trust GBTC.PK. It was seeking to get the ETF listed on NYSE Arca, which is owned by Intercontinental Exchange Inc (ICE.N).

In rejecting more than a dozen proposals for spot bitcoin ETFs over the past year, the SEC has focused on a lack of surveillance-sharing agreements with a regulated market of significant size relating to the underlying assets.

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