The Blockchain Association has provided a brief to the courts outlining the primary arguments in favor of a spot bitcoin exchange-traded product (ETP) from Grayscale.
Last week, crypto asset fund manager Grayscale filed its initial legal statement in the US Court of Appeals. The appeal challenges the Securities and Exchange Commission’s (SEC) decision to refuse to convert its Bitcoin Trust Fund (GBTC) into a spot bitcoin ETF.
This week, the company received support from the Blockchain Association, which filed its own amicus brief on October 18th.
“By denying access to the Spot Bitcoin ETP, the SEC engages in an arbitrary and arbitrary practice of choosing winners and losers between investment products,” said Association Policy Council Marisa Tashman Koppel.
SEC bitcoin double standard
The Blockchain Association is an organization dedicated to improving public policy for crypto networks. Members include industry leaders, lawyers, research firms, security firms and venture capital companies.
The association’s policy chief Jake Cherwinsky supported the move. He hopes this will help the court see “the unfair and illegal double standards that the SEC has applied to bitcoin all these years.”
The brief claims that the SEC violated its own mandate to ensure that “investors are free to choose the products best suited to their goals and have the information necessary to make well-informed decisions.”
Furthermore, the financial regulator has not established a physical distinction between a bitcoin futures-based ETP and a spot fund.
Koppel cited the physically-backed Palladium Fund, which has a market size and exposure similar to bitcoin that has been approved by the SEC. The regulator’s inconsistent approach to investment products appears to be part of its extra-judicial targeting of the crypto industry. This sentiment was also echoed by Republican Senator Tom Emmer earlier this year. Coppel concluded that the SEC was not playing by its rules:
“It is clear that the SEC has no basis for treating spot bitcoin products differently from bitcoin futures products. In doing so, the SEC has abandoned its investor protection mandate.”
Grayscale Bitcoin Fund Discount Deepens
The fund in question is the largest institutional bitcoin fund on the market, with assets under management of $12.4 billion. However, it is currently trading at a record-low discount to its net asset value of -35.8, according to Ycharts.
So far this year, the fund is down 67% as bears drive down the BTC price.
Meanwhile, bitcoin price is trading down 1.9% at $19,215 as the consolidation continues.
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