The US Securities and Exchange Commission (SEC) has again denied Grayscale’s application to launch a bitcoin exchange-traded fund (ETF). According to court records and a report from the Financial Times, the SEC cited concerns about fraud and manipulation as the primary reasons for the rejection.
Grayscale, a leading digital asset manager, argued that the SEC was applying an unfair double standard by allowing the launch of bitcoin futures ETFs while denying proposals for ETFs that invest in the underlying spot bitcoin market.
In response to the accusation of double standards, the SEC stated that it approved bitcoin futures ETFs because they are closely monitored by the Chicago Mercantile Exchange (CME).
According to the SEC, spot bitcoin ETFs, on the other hand, do not have the same level of federal oversight as futures ETFs. This lack of oversight has been cited as one of the main reasons the SEC has hesitated to approve spot bitcoin ETFs.
Grayscale had previously attempted to launch a bitcoin ETF, and the company will likely continue to push for regulatory approval. However, the SEC’s repeated rejections highlight the ongoing debate about the maturity and stability of the cryptocurrency market.
The SEC’s decision will likely disappoint many investors hoping for more mainstream access to bitcoin investments through an ETF. However, it is essential to note that the SEC has the mandate to protect investors and ensure the integrity of financial markets. Its decision to reject the Grayscale bitcoin ETF proposal is in line with this mandate.
The SEC may revisit its stance on bitcoin ETFs as the cryptocurrency market evolves and matures. Until then, investors seeking exposure to bitcoin must do so through other means, such as purchasing the digital asset directly or investing in companies with significant exposure to bitcoin.
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