Blockchain advocacy groups file motion to support Grayscale in lawsuit against SEC

Four blockchain advocacy groups have filed amici curiae in support of Grayscale’s spot Bitcoin ETF lawsuit against the Securities and Exchange Commission (SEC).

The Blockchain Association, Chamber of Digital Commerce, Chamber of Progress, and Coin Center were named as parties to the amici curiae filed before the U.S. District Court on Oct. 18.

1/ Today we filed an amicus brief supporting @Grayscale in its suit against the SEC for rejecting its spot Bitcoin ETP application.

We’re proud to take this momentous step supporting the crypto industry to provide American consumers greater access to these innovative products. pic.twitter.com/YTMxm432oG

— Blockchain Association (@BlockchainAssn) October 18, 2022 

The  SEC had rejected Grayscale’s application to convert its Bitcoin Trust (GBTC) into a spot Bitcoin ETF, citing market manipulation concerns.

The advocacy groups said the SEC’s refusal to approve a spot Bitcoin ETF limits investors’ choice. They argued that several Americans were eager to own investment products that offer exposure to Bitcoin without purchasing the underlying asset.

The SEC was accused of applying discriminating standards in its evaluation of spot and futures Bitcoin ETFs. The SEC has approved several futures ETFs but denied multiple spot ETF applications.

As a result, the group claims the SEC  violated the Administrative Procedures Act that mandates the regulator not to discriminate against securities issuers.

The group argued that spot ETFs are considerably safer and more stable than futures ETFs. Moreover, spot ETFs and futures ETFs all drive their value from the underlying Bitcoin market.

The advocacy groups have called on the SEC to reconsider its action and approve Grayscale’s spot Bitcoin ETF.

Grayscale relentless to get approval

Grayscale filed a lawsuit against the SEC on Oct. 12, claiming that its approval of Bitcoin Futures ETFs without a spot ETF was discriminatory.

Grayscale CEO Michael Sonnenshein said that the investment firm will fight to win, as it considers the SEC’s action as flawed.

Digital Currency Group CEO Barry Silbert added that it was time for the SEC to approve the GBTC spot Bitcoin ETF.

Yes, over 850,000 Americans own $GBTC. It is time for the SEC to approve a spot-based bitcoin ETF https://t.co/aFh00bX9QR

— Barry Silbert (@BarrySilbert) October 12, 2022