- Grayscale Investments has called on the SEC to approve Bitcoin futures ETFs over spot Bitcoin ETFs
- The DCG subsidiary recently wrote to a court in Columbia to highlight the unequal treatment of BTC-based ETFs by the SEC.
- Grayscale’s letter came more than a year after it sued the SEC for denying its mock BTC ETF application.
- The SEC has since rejected several other mock Bitcoin ETF applications filed by BlackRock, Fidelity, etc.
Grayscale Investments, the asset management giant behind the world’s largest Bitcoin, has sued the US Securities and Exchange Commission (SEC) for approving riskier Bitcoin futures ETFs and denying applications for the relatively safer spot Bitcoin ETFs. The subsidiary of the Digital Currency Group (DCG) wrote to the U.S. Court of Appeals for the District of Columbia Circuit earlier today to express its frustration with the SEC’s recent conduct.
Grayscale: Leveraged Bitcoin ETF exposes investors to greater risk
According to the letter sent to Columbia District Court, the SEC’s decision to allow trading of Volatility Shares’ 2x Bitcoin Strategy ETF (BITX) exposed investors to an investment product that was riskier than Bitcoin futures ETF. The letter was sent by Don Verrilli of Munger, Tolles & Olsen, the law firm representing Grayscale Investments. The securities regulator approved trading in the BITX ETF from June 27, 2023. BITX has already accumulated $15 million in assets.
“The fact that the Commission has allowed an ETP to trade bitcoin futures with leverage demonstrates that the Commission arbitrarily treats spot bitcoin ETPs differently than bitcoin futures ETPs.”
Don Verrilli, partner at Munger, Tolles & Olsen
Verrilli stated in his letter that the 2x Bitcoin Strategy ETF tried to double the performance of the S&P CME Bitcoin Futures Daily Roll Index every day. He added that the volatility ETF in question exposed investors to even more risk from the BTC markets than Grayscale’s proposed spot Bitcoin exchange-traded product (ETP). Grayscale’s letter comes more than a year after it sued the SEC for denying its mock Bitcoin ETF application.