DC Circuit judges criticized SEC lawyers as they defended their decision not to approve Grayscale’s move toward a spot bitcoin ETF.
Grayscale Investments LLC participated in oral arguments Tuesday in the United States Court of Appeals for the DC Circuit regarding its attempts to convert its popular Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund (ETF). . In these oral arguments, all three presiding judges apparently sided with Grayscale in their position.
The United States Securities and Exchange Commission (SEC) has repeatedly denied previous attempts to introduce a spot bitcoin ETF. This has led to Grayscalesue the SECalleging that the decisions have been arbitrary and inconsistent with the Commission’s decision to approve Bitcoin futures ETFs.
In today’s arguments, the presiding judges, Chief Justice Sri Srinivasan and Justice Neomi Rao, continually lobbied SEC Senior Counsel Emily Parise on the SEC’s differentiation between a futures ETF and a bitcoin ETF. cash.
“[The prices] move together 99.9% of the time. So where is the gap, in the Commission’s view? asked Judge Rao.
The SEC’s response was that correlation does not equal causation, and its lawyers explained that the key empirical question is whether fraud and manipulation in the spot markets affect futures in the same way so they can trust it. surveillance of futures markets. Without that missing piece of evidence, the SEC lawyer said, the agency can’t be sure it can rely on future CME surveillance to approve a spot ETF.
The challenge led to the pontification that the SEC had not provided sufficient evidence to explain its decision, with Judge Rao telling Parise: “The SEC has offered no explanation that the petitioners are wrong.”
The complete record of the interrogation can be heard here.
