Grayscale has filed a lawsuit against the US Securities and Exchange Commission (SEC) over the denial of its spot Bitcoin exchange-traded fund (ETF). The lawsuit is gaining popularity as seen in the support it is gaining from leading players in the cryptocurrency sector.
Coinbase files amicus brief backing Grayscale’s lawsuit against SEC
The Coinbase exchange has filed an amicus brief supporting the lawsuit filed by Grayscale against the SEC. Coinbase becomes the latest crypto player to support this lawsuit. The Blockchain Association, Chamber of Digital Commerce, Chamber of Progress, and Coin Center have also supported the lawsuit.
These firms have noted the strong consumer demand in the US for Bitcoin exposure while arguing in the Washington federal appeals court that Bitcoin ETFs were safe and transparent to investors.
The groups have accused the SEC of applying double standards while rejecting proposals for listing a spot Bitcoin ETF. The groups also add that a continuous denial of the proposals to list a spot Bitcoin ETF ignores the “robust anti-fraud and antimanipulation” features of the product, including the unique characteristics of the Grayscale Trust.
The filing also adds that the SEC is inconsistent with its treatment of similar products, which showed contradictions in the regulatory and policy imperatives of the agency. It also notes that the Commission was not using the same standards for the Bitcoin futures ETFs, and spot ETFs, saying it was bad policy.
The filing added,
The Commission must treat cases alike. Because the Commission has not established material differences between Bitcoin futures ETPs and spot Bitcoin ETPs that warrant disparate treatment, its decision not to approve the Grayscale Trust is arbitrary and capricious and inconsistent with the Commission’s regulatory remit.
The group has also said that the SEC was using a “thumb on scale” approach that was not compliant, adding that despite the Commission’s failure to approve a spot Bitcoin ETF, it continued to allow risker products in the market.
Grayscale’s Bitcoin ETF receives overwhelming support
Reports have also said that more than 11,000 letters have been received by the SEC to support the plans of Grayscale to convert the Grayscale Bitcoin Trust into a spot Bitcoin ETF.
The Chief Legal Officer at Grayscale, Craig Salm, had said that similar filings would continue to be made ahead of the deadline. Other filings of support have also been made by tech companies like Susquehanna and the Silvergate crypto bank.
Amicus briefs are also known as friends of the court. These filings are made by individuals and organizations with a strong interest in the case but are not a representation of a party to an action.
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