Last night our attorneys at Davis Polk sent a letter to the SEC arguing that approval of #Bitcoin futures-based ETFs, but not #Bitcoin spot-based ETFs, like $GBTC, is “arbitrary and capricious,” and therefore in violation of the Administrative Procedure Act (APA).
This is a new argument in the context of $BTC ETFs that wasn’t possible until the approval of the first #Bitcoin futures-based #ETF and subsequent rejection of yet another spot-based ETF. So, what is this new argument?:
The APA requires the SEC to treat *like* situations *alike* absent a reasonable basis for different treatment. This means the SEC must treat similarly situated investment products similarly.
#Bitcoin ETF products -- Bitcoin futures-based ETFs registered under the ‘40 Act and Bitcoin spot-based ETFs registered under the ‘33 Act -- are an example of two *like* situations that should be treated *alike*… but are no longer.
Arguments citing the added protections of the ‘40 Act vs. ‘33 Act or CME bitcoin futures being more “regulated” than spot bitcoin - are misplaced in the context of Bitcoin ETF approvals.
We unpacked this letter and the new argument in favor of a spot Bitcoin ETF in a @Grayscale Source post here: grayscale.com/unpacking-the-…
Thank you to Joe Hall, Annette Nazareth, Jai Massari, Greg Rowland, Zach Zweihorn, Paul Mishkin, Daniel Schwartz and the rest of the Davis Polk team; @RepTomEmmer & @RepDarrenSoto; and everyone else who has been supporting @grayscale in its mission to convert $GBTC into an #ETF.
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