Grayscale Lawyer Criticizes SEC Over Leveraged Bitcoin ETF
Grayscale's leading crypto investment lawyer, Donald Verrilli, has argued that leveraged cryptocurrency ETFs are "an investment product even riskier".
Grayscale Lawyer Criticizes SEC Over Leveraged Bitcoin ETF
Grayscale's top crypto investment firm lawyer has criticized the U.S. Securities and Exchange Commission (SEC) for approving the first 2x leveraged Bitcoin futures ETF while consistently rejecting spot products.
In a letter to the U.S. District Court for the District of Columbia, lawyer Donald Verrilli argued that leveraged Bitcoin ETFs are "an investment product even riskier". Verrilli stated:
"The fact is that the commission has approved a leveraged Bitcoin futures ETF, which is clearly discriminatory against Bitcoin spot ETFs."
As reported by Coin68, the Volatility Shares 2x Bitcoin Strategy ETF, ticker BITX, was listed on the stock exchange last month after not being blocked by the SEC. Volatility Shares claims their product is the first 2x leveraged Bitcoin futures ETF in the U.S. (What is Bitcoin?)
Last year, Grayscale sued the SEC for rejecting the proposal to convert the Grayscale Bitcoin Trust (GBTC) into a Bitcoin spot ETF.
At the time, the SEC argued that futures products are less susceptible to manipulation as they are based on prices from the CME, regulated by the Commodity Futures Trading Commission (CFTC).
As of now, the SEC has yet to approve any Bitcoin spot ETFs, but major Wall Street asset managers such as BlackRock and Fidelity have recently resubmitted their applications to the agency.
These proposals may face numerous hurdles ahead, as the SEC has cited concerns about fraud and market manipulation in the past. According to former SEC Chairman Jay Clayton, a Bitcoin ETF could become a reality if it demonstrates investor protection capabilities.
