Grayscale Criticize SEC for Approving First Leveraged ETF Launch
Grayscale, a crypto asset manager, has expressed criticism towards regulators for approving a leveraged bitcoin-based exchange-traded fund (ETF) while the company’s own spot bitcoin ETF application remains rejected by the U.S. Securities and Exchange Commission (SEC).
In a letter shared on Twitter and addressed to the U.S. Court of Appeals for the District of Columbia Circuit, Grayscale’s lawyers argue that the SEC’s approval of a leveraged ETF in June, which they deem “even riskier” than their own bitcoin-based futures products, demonstrates the SEC’s discriminatory treatment.
The letter suggests that while the SEC could rectify its discriminatory actions by rescinding approval for all bitcoin-based ETFs, the recent approval of a leveraged bitcoin futures ETF indicates that the SEC has no intention of doing so. Grayscale’s lawyers point out that the leveraged bitcoin futures ETF poses a particularly high level of risk.
Grayscale had previously filed a lawsuit against the SEC after its application to convert the Grayscale Bitcoin Trust into an ETF was rejected last year, claiming a violation of the Administrative Procedures Act.
Meanwhile, the SEC recently approved a 2x leveraged Bitcoin futures ETF by Volatility Shares, which has further added to Grayscale’s criticism.
The letter suggests that while the SEC could rectify its discriminatory actions by rescinding approval for all bitcoin-based ETFs, the recent approval of a leveraged bitcoin futures ETF indicates that the SEC has no intention of doing so. Grayscale’s lawyers point out that the leveraged bitcoin futures ETF poses a particularly high level of risk.
Grayscale had previously filed a lawsuit against the SEC after its application to convert the Grayscale Bitcoin Trust into an ETF was rejected last year, claiming a violation of the Administrative Procedures Act.
Meanwhile, the SEC recently approved a 2x leveraged Bitcoin futures ETF by Volatility Shares, which has further added to Grayscale’s criticism.
