Digital currency investment firm Grayscale filed a petition against the U.S. Securities and Exchange Commission (SEC) after the regulator rejected its application to launch a spot bitcoin exchange-traded fund (ETF).
The SEC said it dismissed Grayscale’s application as the crypto firm failed to provide clear answers to questions about market manipulation issues. Because of that, the agency believes investors would not be appropriately protected under Grayscale’s bid.
The digital asset investment manager filed an application to turn its Bitcoin Trust (GBTC) into an ETF last October but the ruling was delayed numerous times. Grayscale tried to push the SEC to accept the proposal through efforts such as allowing consumers to quickly email the watchdog in support of the conversion of GBTC to an ETF.
But the SEC still rejected the proposal in the end, shortly after which Grayscale sued the agency through litigation led by its senior legal strategist and a former U.S. solicitor general, Donald B. Verilli Jr.
Verrilli said the watchdog is “failing to apply consistent treatment to similar investment vehicles, and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934.”
The firm also accused the SEC of being inconsistent given that it had previously approved similar bitcoin-based ETFs – both those that are based on futures markets and those that let investors short the crypto asset.
Source: Cryptocurrency - investing.com
