Grayscale: US Securities and Exchange Commission Rejects Spot Bitcoin ETF Grayscale

The U.S. securities regulator on Wednesday rejected a listing offer for a Bitcoin spot exchange-traded fund (ETF) from shades of grayone of the world’s largest digital asset managers, on the NYSE Arca exchange.

Grayscale has taken legal action against the decision, the latest in a series of rejections of U.S. spot bitcoin ETF listing offers over the past year.

The Securities and Exchange Commission (SEC) said the ETF’s listing offer falls short of a standard designed to prevent fraud and manipulation and protect investors and the public interest.

Grayscale has proposed creating an ETF as a transformation of their Grayscale bitcoin trust. Intercontinental Exchange Inc owns NYSE Arca.

The SEC said its disapproval is not based on “an assessment of whether bitcoin or blockchain technology in general has utility or value as an innovation or investment.”

Grayscale said it filed a lawsuit against the regulator in response and would argue that the SEC violated the Administrative Procedure Act and the Securities Exchange Act.

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In his statement, he pointed to the SEC’s approval of an ETF based on bitcoin futures. “If regulators are comfortable with ETFs that hold derivatives of a given asset, they should logically be happy with ETFs that hold that same asset,” the post reads.

Having rejected more than a dozen Bitcoin ETF discovery proposals over the past year, the SEC has focused on the lack of significant size joint oversight agreements with a regulated market on underlying assets.

The price of bitcoin, the largest digital currency, has fallen by about 70% from its November high of $69,000.

Other cryptocurrencies and crypto-related stocks have fallen in recent months as investors dumped riskier assets in response to high inflation and tightening policies by major central banks.

Spot bitcoin ETF issuers rejected by the SEC in recent months included Fidelity, SkyBridge and Valkyrie, all of which sought to provide easy access to the digital currency.

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