Not long ago, the Securities and Exchange Commission (SEC) approved a different kind of bitcoin-based exchange-traded fund (ETF), and crypto conglomerate Grayscale isn’t happy about that. Grayscale is Seeing Red The ETF that garnered approval is called 2X Volatility Shares, and it became open for public trading on June 23. For many players out there, the move was the right one and a big step in a powerful new direction that’s likely to make crypto mainstream and legitimate in many traders’ eyes, but Grayscale is a little ticked off that the SEC would allow such a product to be made available while going quite far to say “no” to its own application. 2X Volatility is not a bitcoin spot ETF, but even still, Grayscale says it went through hell and high water to
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Not long ago, the Securities and Exchange Commission (SEC) approved a different kind of bitcoin-based exchange-traded fund (ETF), and crypto conglomerate Grayscale isn’t happy about that.
Grayscale is Seeing Red
The ETF that garnered approval is called 2X Volatility Shares, and it became open for public trading on June 23. For many players out there, the move was the right one and a big step in a powerful new direction that’s likely to make crypto mainstream and legitimate in many traders’ eyes, but Grayscale is a little ticked off that the SEC would allow such a product to be made available while going quite far to say “no” to its own application.
2X Volatility is not a bitcoin spot ETF, but even still, Grayscale says it went through hell and high water to ensure its application was fully compliant with all SEC laws. As usual, the financial agency was quick to issue a stamp of disapproval on the company’s application form, and Grayscale has now engaged in a lawsuit against the SEC.
One of the crypto company’s lawyers, Donald Verilli, said the SEC broke its own rules to permit the trading of 2X Volatility, thus giving the product an unfair advantage and creating harsher competition for Grayscale. He commented in a recent interview:
The fact that the Commission has allowed a leveraged bitcoin futures ETP to begin trading demonstrates that the Commission continues to arbitrarily treat spot bitcoin ETPs differently than bitcoin futures ETPs… While the Commission could theoretically correct its discriminatory treatment of spot bitcoin ETPs by rescinding its approval of all bitcoin ETPs, the Commission’s apparent willingness to permit even a leveraged bitcoin futures ETP, a particularly high-risk version of a bitcoin futures product, makes clear [it] has no intention of doing so.
Bitcoin ETFs have been all the rage over the past few years, though steam has really picked up in recent months following the introduction of a new bitcoin ETF application from standard financial firm BlackRock. The company has a solid track record with the SEC, with more than 500 applications approved in the past by the financial agency.
While the SEC was quick to reject BlackRock’s initial documentation, the papers were swiftly revised per the agency’s advice and they’re now awaiting further evaluation.
The Grayscale ETF founder Justin Young threw his two cents into the mix by commenting on the double standards and hypocrisy the SEC appears to exhibit. He said:
I think it brings to a lot of people’s attention the thought that if the SEC has let a leveraged bitcoin-linked product through, why on Earth wouldn’t they allow spot bitcoin through?
A Stronger Desire for BTC
On Twitter, Grayscale wrote:
Investors are eager for $BTC exposure with the protections of the ETF wrapper.