The world’s largest digital asset manager Grayscale Investments has filed a letter to the US Court of Appeals questioning the move by the United States Securities and Exchange Commission (SEC) to approve a leveraged Bitcoin ETF filing while persistently refusing to sanction its spot Bitcoin ETF application.
“Today, our attorneys filed a letter with the DC Circuit highlighting the disparity between the SEC’s approval of a leveraged bitcoin futures ETF while continuing to deny approval of spot bitcoin ETFs like GBTC,” Grayscale tweeted.
Grayscale Disputes Disparity
The digital asset manager disputed that the sole reason for the SEC’s rejection of its spot Bitcoin ETF is even more pronounced in the leveraged Bitcoin ETF that the US regulator watchdog approved. The SEC rejected Grayscale and all other applications for a spot Bitcoin ETF, citing the sector’s increased risk for investors.
Grayscale stated that a 2x leveraged bitcoin futures ETF intends to double the performance of the S&P CME Bitcoin Futures Daily Index daily. According to the asset manager, it presents more risk to investors than a typical bitcoin futures exchange-traded product.
Furthermore, Grayscale noted that it does not imply that the leveraged Bitcoin ETF should not exist; rather, it is only pointing out that there were no logical explanations for the US top regulator approving such a product and leaving the spot Bitcoin ETF behind.
The US SEC approved its first leveraged Bitcoin ETF last month. Volatility Shares 2x Bitcoin Strategy ETF (BITX) launched on the Chicago Board Options Exchange (CBOE) on June 27 after it gained approval four days earlier.
More Arsenal for the Legal Battle
The leveraged Bitcoin futures ETF approved by the SEC has given Grayscale more arsenals to proceed in its legal battle with the regulator, it noted.
“Since then, actions by the SEC, such as the approval of a leveraged bitcoin futures ETF, have provided more support for our legal argument that the SEC is acting in an arbitrary manner,” Grayscale tweeted.
Recent activities around the spot Bitcoin ETF could put the SEC under intense pressure to get it off its sleeves. The BlackRock application and Grayscale’s structured legal action against the SEC mean all eyes are on the US regulatory watchdog.
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