Grayscale, a leading cryptocurrency company, has submitted a letter to the DC Circuit Court of Appeals to appeal against the SEC's decision to reject the spot Bitcoin ETF application.
The company argues that the SEC acted arbitrarily by approving a leveraged Bitcoin futures ETF while rejecting spot Bitcoin ETFs.
In a letter to the U.S. Court of Appeals for the District of Columbia on Monday, Grayscale attorney Donald Verrilli argued that a leveraged Bitcoin ETF is “an even riskier investment product” from the spotlight.
“The fact that the SEC has allowed a leveraged BTC futures ETF to start trading shows that the institution continues to treat spot BTC ETFs arbitrarily differently from Bitcoin futures ETfs,” Verrilli said.
A leveraged BTC futures ETF, recently approved by the SEC, aims to double the daily performance of a BTC futures index using borrowed funds.
The company says it is not against the existence of leveraged futures products, but rather against the inconsistency and unfairness of the SEC's approval process.
Grayscale applied for a spot BTC ETF in 2020, but was rejected by the SEC on the grounds that the BTC market was insufficiently regulated and transparent. The company later sued the SEC, alleging that the agency violated the Administrative Procedure Act and Investment Company Act by applying different standards to different types of Bitcoin products.
*Not investment advice.