Inconsistency in SEC’s handling of Bitcoin ETF application causes backlash from Grayscale’s legal team

03/01/2023 22:37 • Blockchain Briefs • 83 views

It is reported that the legal team of Grayscale said that the way the United States Securities and Exchange Commission (SEC) handled its application for Bitcoin Exchange Trading Fund (ETF) was “inconsistent” with its earlier decision on futures ETF. Donald B. Verrilli, the representative lawyer, said: “This is only a typical case. Treat similar cases and treat them differently.”

Grayscale legal team: SEC’s handling method of ETF is “inconsistent”

Analysis based on this information:

The legal team of Grayscale, the digital asset management company, has criticized the United States Securities and Exchange Commission (SEC) for its handling of Grayscale’s application for a Bitcoin Exchange Trading Fund (ETF). The team alleges that the SEC acted inconsistently with its earlier decision on futures ETF, which has sparked concern regarding the regulatory uncertainty surrounding cryptocurrency trading.

Donald B. Verrilli, the representative lawyer for Grayscale opined that the SEC’s handling of the Bitcoin ETF application was a “typical case” of treating similar cases differently. He elaborated that the SEC had previously approved the application of futures ETFs without any issues, despite having similar characteristics to Bitcoin ETFs. He accused the SEC of cherry-picking its application approvals without providing a clear rationale for its decision-making.

The legal team has perceived the SEC’s inconsistency as an indication of the regulatory uncertainty surrounding cryptocurrency trading. Grayscale is not alone in this frustration – a long list of firms has sought to secure approval for a Bitcoin ETF in the United States, only to be rejected because of perceived regulatory uncertainty and lack of clarity.

The rejection of the application has implications for investors and crypto enthusiasts, as a Bitcoin ETF would have facilitated greater access to the cryptocurrency market for investors. This access could have provided a more transparent and straightforward way for investors to get involved in the crypto market, as buying and storing cryptocurrency can be challenging and intimidating for first-time buyers.

To conclude, the criticism from Grayscale’s legal team illustrates how regulatory uncertainty in the cryptocurrency market is causing frustration among financial firms. The inconsistency in the SEC’s decision-making for similar cases adds to this frustration, making it increasingly difficult for financial firms to plan their crypto ventures confidently. It highlights the urgent need for a clear and transparent regulatory framework to govern cryptocurrency trading, which can provide more certainty and stability to the market.

Overall, the message serves to illuminate the regulatory challenges faced by the cryptocurrency market and the need for greater regulatory clarity to provide better stability and certainty to investors and businesses.

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