Elliot Stein, a senior litigation analyst for Bloomberg, recently appeared in an episode of Unchained Podcast hosted by Laura Shin.
The analyst gave his insights into Grayscale’s lawsuit against the Securities and Exchange Commission over the latter’s rejection of a spot Bitcoin ETF application.
Stein revealed that in the latest hearing held on 7 March, Grayscale argued that there was an inconsistency in the standards that the SEC was applying because they approved applications for a Bitcoin futures ETF but have consistently rejected applications for a spot bitcoin ETF.
Grayscale argues that since the underlying assets for both products are the same and derive their price from Bitcoin, the wall street regulator should treat the products similarly, but that is not the case.
Grayscale has alleged that the regulator’s behavior is arbitrary and capricious and as such, violates U.S. federal law.
The SEC responded by arguing that it had been applying the same standards but the products were, in fact, different.
According to the SEC, the Bitcoin futures market is regulated by the CFTC which makes it different from the spot BTC ETF, which they believe has no regulatory oversight.
Prior to the hearing, Elliot Stein believed that the SEC had an edge in the lawsuit and that their odds of winning were much more than that of the GBTC issuer since courts tend to defer to federal agencies because they are experts in their respective fields.
However, after hearing the latest arguments, the Bloomberg analyst gave Grayscale a 70% chance of winning the case.
In the event that Grayscale wins the lawsuit, approval for its spot Bitcoin ETF may not come immediately. According to Stein, the application will most likely be sent back to
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