Federal appellate court judges are set to hear arguments on Tuesday in Grayscale Investments' case against the U.S. Securities and Exchange Commission over the agency's rejection of the crypto asset manager's application to create a spot bitcoin exchange-traded fund.
Grayscale's legal team plans to argue before the District of Columbia Court of Appeals in Washington that the SEC acted arbitrarily in rejecting applications for spot bitcoin ETFs when it had previously approved bitcoin futures ETFs, according to the company's lead counsel.
Bitcoin futures ETFs track bitcoin futures contracts, or agreements to purchase or sell bitcoin at a certain price on a specified date. A spot bitcoin ETF would track bitcoin's underlying market price. Proponents say a spot bitcoin ETF would enable investors to gain exposure to bitcoin without directly buying it.into an ETF last June, arguing the proposal did not meet standards aimed at preventing fraudulent practices and protecting investors.
"The most basic way in which an agency can act in an arbitrary and capricious manner is to take like cases ... and treat them different, and essentially, that's what we have here," Donald Verrilli Jr., an Obama-era U.S. solicitor general who is lead counsel for Grayscale, told reporters in a briefing last week.The agency has denied more than a dozen spot bitcoin ETF applications, all of which it said lacked surveillance-sharing agreements to detect potential manipulation.
The company's chief executive officer, Michael Sonnenshein, has said he expects a final ruling in the case this fall, and that he anticipates the court will rule in Grayscale's favor. He told Reuters in January that GrayscaleGrayscale Bitcoin Trust, launched in 2013, has $14 billion in assets under management, according to
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