Grayscale labels SEC stance on spot Bitcoin ETFs as ‘discriminatory’.

The asset-management firm Grayscale Investments has filed an opening brief with the U.S. Court of Appeals for the D.C. Circuit in the lawsuit against the U.S. Securities and Exchange Commission (SEC).

2/ The SEC’s decision back in June was disappointing, but we were prepared for all possible outcomes. That same night, we took action. We’ve now reached the next milestone in the legal process. pic.twitter.com/MPO3TiytLJ

— Grayscale (@Grayscale) October 12, 2022

“The opening brief is the first substantive document filed with the court that explains the legal basis of our arguments,” the company said.

Grayscale Investments contends that the Commission is “arbitrary” and “discriminatory” in its consideration of spot Bitcoin ETFs versus futures-based variants. The firm regards the SEC’s reference to the requirements for “preventing fraudulent and manipulative acts” to be “deeply mistaken.”

“Our application to convert the [trust] GBTC into a Bitcoin ETF satisfies the requirements of the relevant law,” the statement said.

Lawyers for Grayscale Investments emphasised that the regulator’s position is inconsistent and unfair.

8/ Our legal team argues that there is only one reasonable conclusion to draw: that the SEC is arbitrarily treating spot #Bitcoin ETFs with “special harshness” – inconsistently and unfairly compared to other types of investment vehicles without adequate justification.

— Grayscale (@Grayscale) October 12, 2022

“The Commission violated the most fundamental requirements [the Administrative Procedure Act], failing to justify its markedly different treatment of futures and spot Bitcoin ETPs,” Grayscale concluded.

The SEC is expected to file its response to the opening brief by November 9.

On October 19, 2021, Grayscale filed an application to convert the Bitcoin Trust GBTC into a spot-price ETF.

On December 17, the SEC delayed a decision on Grayscale Investments’ application. In February 2022, the Commission took this step again. On June 30, the company filed suit against the regulator after the final rejection of its filings.

The Wall Street Journal editorial board criticized head of the agency Gary Gensler for a “confusing” approach to approving spot Bitcoin ETFs.

Also voicing condemnation of the Commission were billionaire Mark Cuban, member of the U.S. House of Representatives Tom Emmer and Messari founder Ryan Selkis. According to the latter, Grayscale’s rejection is fraudulent.

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