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Grayscale sues SEC after rejection of bid to turn the largest bitcoin fund into an ETF

The SEC was not immediately available for comment outside of normal U.S. working hours.

Grayscale argues the SEC’s position is inconsistent in light of previous decisions to greenlight other bitcoin-based ETFs, including those based on futures markets and one that allows investors to short — or bet against — the cryptocurrency.

Crypto bulls had pinned their hopes on the SEC approving the first U.S. spot bitcoin ETF, a move that would potentially open the cryptocurrency up to more institutional investment.

The move to deny Grayscale’s bitcoin ETF application adds to a slew of negative news around crypto lately. Earlier this week, embattled crypto hedge fund Three Arrows Capital collapsed into liquidation.

Bitcoin was trading at $20,085 late Wednesday, down 1% in the last 24 hours. Cryptocurrencies have lost a combined $2 trillion in over market value since the peak of the bubble in November 2021.

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