Grayscale Seeks Ethereum Futures ETF
Grayscale, the global leader in cryptocurrency investment products, has taken a significant step towards expanding its product offerings by filing an application for an Ethereum (ETH) futures-based exchange-traded fund (ETF). This move follows their recent legal victory, which granted them the green light to initiate a Bitcoin spot ETF.
Grayscale’s ETF Efforts
The application for an Ethereum futures ETF was submitted under the Securities Act of 1933, a regulatory framework that governs commodities and spot Bitcoin (BTC) ETFs. This marks Grayscale’s second attempt at an Ethereum futures ETF, with their initial application filed under the Investment Company Act of 1940, the act primarily regulating security-based ETFs.
Notably, the U.S. Securities and Exchange Commission (SEC) has approved Bitcoin futures ETFs under both regulatory acts, making the choice of framework an important distinction. Grayscale has been embroiled in a legal battle with the SEC over its bid to convert the Grayscale Bitcoin Trust (GBTC) into an ETF. The SEC initially rejected this proposal, expressing concerns about investor protection against fraudulent and manipulative practices in the Bitcoin market. In response to the SEC’s denial, Grayscale criticized the agency’s stance as “illogical” and “discriminatory.” They argued that the SEC had applied similar arguments to reject numerous Bitcoin-focused ETFs in the past.
Victory in SEC Challenge
To strengthen their case, Grayscale garnered support from four prominent affiliations: The Blockchain Society, The Chamber of Digital Commerce, the Chamber of Progress, and Coin Center. These entities filed an amicus curiae, a legal brief that provides additional information and arguments to the court, expressing their support for Grayscale and questioning the SEC’s decision. In a recent turn of events, Grayscale achieved a significant legal victory when a panel of three federal judges in Washington overturned the SEC’s decision, paving the way for the launch of a Bitcoin spot ETF.
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Grayscale’s persistence in their legal battle underscores their commitment to converting their Bitcoin investment vehicle into an ETF. With the recent court ruling in their favour, the cryptocurrency community eagerly anticipates their next steps in the rapidly evolving ETF landscape. Meanwhile, the filing for an Ethereum futures ETF signals Grayscale’s intent to expand its cryptocurrency investment product portfolio and cater to the growing demand for diversified digital asset offerings.
