Coinbase files brief backing Grayscale’s ETF lawsuit against SEC

Coinbase (NASDAQ: COIN) has filed an amicus brief in support of digital assets manager Grayscale Investments, which is suing the US Securities and Exchange Commission (SEC) over the rejection of the company’s spot Bitcoin ETF application.

Amici Curiae- but the SEC has allowed ‘riskier’ products

The cryptocurrency exchange’s backing of Grayscale aligns with a brief by the Blockchain Association, Coin Center and the Chamber of Digital Commerce.

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On Tuesday, the Amici Curiae brief filed at the US Court of Appeals for the District of Columbia Circuit, noted “the need for greater regulatory clarity and consistency” around the SEC’s decisions on spot Bitcoin ETFs.

Particularly, the brief points to the agency’s continued denial of all spot Bitcoin ETF proposals before it, while at the same time allowing exchange traded products (ETPs) based on the same asset. The brief read in part:

“The Commission’s “thumb on the scale” approach to Bitcoin ETPs does not withstand scrutiny. Bitcoin spot ETPs like the Grayscale Trust are ideally suited for investors that desire exposure to Bitcoin; the Commission has allowed similar, and riskier, products to enter the market; and spot Bitcoin ETPs plainly satisfy regulatory requirements for listing on a national securities exchange, just like Bitcoin future ETPs do.”

Grayscale applied for approval to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF in 2021, but the SEC denied the application in June this year, citing similar reasons that had seen multiple other ETFs thrown out.

In response, Grayscale immediately filed a lawsuit against the SES, with the company’s chief legal officer Craig Salm noting in July that the case was likely to take 12 months to two years.