Crypto Company Grayscale Files Lawsuit To SEC Because Of Exchange Traded Fund. Digital currency asset manager Grayscale is in a legal battle with the US Securities and Exchange Commission (SEC) over his latest rejection of the company’s prospective spot bitcoin exchange-traded fund.
Last Wednesday, the SEC rejected Grayscale’s filing to convert its bitcoin trust into a spot ETF. Later, the company filed a lawsuit with the SEC that same day.
Grayscale Bitcoin Trust, codenamed GBTC, is the world’s largest public bitcoin fund.
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BTC ETFs are exchange-traded funds that specifically track the price of cryptocurrencies and allow traders to try to enter the crypto market without directly owning the crypto asset. They can be settled in cash which means investors can receive fiat money instantly.
Grayscale CEO, Michael Sonnenshein said, simply asking the SEC to maintain this product to a higher standard, to provide greater investor protection and provide investors with greater risk disclosure.
He identified potentially capricious treatment by the SEC, which allows bitcoin futures products to be traded under certain rules and regulations but denies spot products have equal opportunity.
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“The inconsistent treatment here by the SEC of allowing futures products to be traded but denying spot products to be traded doesn’t see essentially the same exact market through the same lens here,” Sonnenshein said. .
To date, the SEC has declined to comment beyond its injunction against Grayscale’s application.
Crypto Company Grayscale Files Lawsuit To SEC Because Of Exchange Traded Fund. Previously, the CEO of crypto exchange FTX and crypto billionaire, Sam Bankman-Fried said his company still had “several billion dollars” to shore up companies struggling with falling crypto prices.
Bankman-Fried, originally from California but living in the Bahamas where FTX is based, has become a hero in the crypto industry in recent weeks. He gives life to a digital asset platform that has faltered as cryptocurrency prices have fallen.
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“We’re starting to get a few more companies reaching out to us. “Those companies are generally not in a dire situation, although some of the smaller crypto exchanges may still fail, he said,” Bankman-Fried said.
Another Bankman-Fried crypto trading firm, Alameda Research, is providing crypto lender Voyager Digital with a USD 200 million revolving credit facility, cash and stablecoins, and bitcoin facilities. The company Voyager Digital is currently facing losses from exposure to the crypto hedge fund Three Arrows Capital.
Also in June, FTX handed US cryptocurrency lender BlockFi a $250 million revolving credit facility and announced a deal that gave FTX the right to buy it based on certain performance triggers.
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According to Bankman-Fried, the purpose of a bailout is to protect customer assets and stop contagion from bouncing through the system.
“Having trust with consumers that things will work as advertised is very important and if they break it’s very difficult to return,” explains Bankman-Fried.
In January, FTX launched FTX Ventures, a $2 billion venture capital fund focused on digital asset investments, which has since been used to help rescue companies that lack liquidity, but not assets.
Previously, FTX co-founder and CEO and crypto billionaire, Sam Bankman-Fried was open to the acquisition of a troubled crypto mining company to help stem the contagion in the crypto industry.
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“If we think about the mining industry, they played little role in the possible spread of the contagion, to the point that there were miners who pledged loans with their mining rigs,” said Bankman Fried, quoted from Yahoo Finance, Thursday (7/7/2022).
“There could be a very interesting opportunity for us, I definitely don’t want to ignore that possibility,” he added.
Bankman Fried explained in more detail about this plan in a tweet on Twitter some time ago. Bankman Fried tweeted he didn’t specifically look at the miners, but was happy to have a conversation with any company.
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Private and public crypto miners face margin calls and defaults after owed anywhere between USD 2 billion and USD 4 billion to finance the construction of their giant facilities across North America, according to data compiled by CoinDesk and industry participants.
Previously, FTX just announced last Friday that it had struck a deal with crypto lender BlockFi to provide BlockFi with a USD 400 million credit facility and potentially up to USD 240 million.
Crypto Company Grayscale Files Lawsuit To SEC Because Of Exchange Traded Fund. Then Alameda Research, which is owned by Bankman-Fried, previously provided a USD 200 million cash and USDC loan and a 15,000 bitcoin (USD 294 million) revolving credit facility to the troubled crypto exchange Voyager Digital.
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Because regulations are still gray in the crypto industry, it is difficult for crypto companies to find funds to deal with the recent decline in crypto prices.
Bankman Fried and his company are now considered a savior for major crypto industry players amid the ongoing price pressures. Bankman Fried is also known as a humble person because he prefers to donate most of his wealth rather than keep it for himself.
