Coinbase, America’s biggest cryptocurrency exchange, has filed an amicus brief in support of Grayscale’s lawsuit against the Securities and Exchange Commission (SEC) for rejecting the spot Bitcoin exchange-traded fund (ETF).
Coinbase Backs Grayscale against the SEC
In June, the SEC rejected Grayscale’s application to convert its $13.5 billion Grayscale BTC (GBTC) fund into a spot-based Bitcoin ETF. The crypto asset manager responded by filing a lawsuit against the regulator.
Grayscale has accused the SEC of “failing to apply consistent treatment to similar investment vehicles.” This is evidenced by the SEC’s willingness to approve multiple futures ETFs but consistently denying the approval of a spot Bitcoin ETF.
In an amici curiae brief filed with the U.S. Court of Appeals for the District of Columbia on Tuesday, October 18th, Coinbase has taken sides with Grayscale, levying the same allegations on the SEC.
Futures and Spot ETFs Offer the Same Exposure
A key argument in Coinbase’s filing is that both spot and future ETFs “create the same investment exposure for investors” regardless of the asset they are tied to. This is because “both products are designed to track the price of the underlying commodity, Bitcoin.”
Coinbase also argues that the SEC is acting on limited knowledge of blockchain and crypto. By preventing Bitcoin spot ETFs from entering the market, Coinbase argues that the SEC was “picking winners and losers among investment products.”
On the Flipside
- The SEC rejected Grayscale’s proposal citing market manipulation and proper methods of protecting investors.
Why You Should Care
The actions of Coinbase highlight the huge demand from institutional investors for spot Bitcoin products.
Read about Grayscale’s lawsuit against the SEC in:
Grayscale Launches Legal Battle Against SEC for Rejecting Spot Bitcoin ETF
Its latest lawsuit is covered in:
Grayscale Files Lawsuit against the U.S. SEC over Denial of Bitcoin spot ETF