US-based Grayscale Investments, one of the biggest bitcoin (BTC) and crypto investment companies is suing US Securities and Exchange Commission (SEC) after it rejected Grayscale’s application to convert the Grayscale Bitcoin Trust (GBTC), the world’s largest BTC fund, to a spot exchange-trading fund (ETF).

“It is the SEC’s arbitrary and capricious actions and discriminatory treatment of issuers that necessitates elevating this matter to the courts in the best interest of GBTC and our investors,” the company said. 

According to them, the market watchdog failed to apply consistent treatment to BTC investment vehicles as demonstrated by its denial of GBTC’s application for conversion to a spot ETF, but approval of several BTC futures ETFs.

“If regulators are comfortable with ETFs that hold derivatives of a given asset, they should logically be comfortable with ETFs that hold that same asset,” they added.

Meanwhile, the SEC still maintains that the GBTC conversion would not prevent fraudulent and manipulative acts and practices and nor it would protect investors and the public interest.

The GBTC now possessed USD 12.9bn worth of BTC. According to Grayscale, as of June 29, GBTC shares traded at an around 30% discount to net asset value, representing around USD 8bn of unrealized shareholder value.

“We hold firm in our belief that converting GBTC to a spot Bitcoin ETF remains the best option for investors: it would effectively eliminate the discount and cause the shares to track the price of bitcoin,” said the firm.

At 03:49 UTC, BTC traded at USD 20,078 and is down 1% in a day and maintained almost the same in a week.


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