On June 29, the United States Securities and Exchange Commission () has reaffirmed its anti-crypto stance by refuse Grayscale's proposal to list an exchange-traded fund spot delivery (ETF) on the NYSE Arca exchange.

Follow , this proposal does not meet standards designed to prevent fraud and market manipulation. It states that the action to refuse is not based on “an assessment of whether good technology in general, whether there is utility or value as an innovation or an investment”.

They have identified and listed possible sources of fraud and manipulation in the market Bitcoin immediate delivery. Among them are Wash Trade (wash trade), manipulation from whales, exchanges and networks, dissemination of misinformation and notably manipulation related to , including ().

Legal challenge from Grayscale

Grayscale CEO Michael Sonnenshein has react by arguing that the SEC violated the Administrative Procedures Act and the Securities Exchange Act.

In a statement regarding the action, Grayscale questioned why managers are comfortable with derivatives of a certain asset, but they are uncomfortable with funds that hold the asset itself.

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“We have filed a lawsuit against the SEC.”

Donald B. Verrilli Jr., Grayscale senior legal strategist and former US General Counsel stated:

“The SEC is not applying consistent treatment to similar investment vehicles, thereby acting arbitrarily and in violation of the Administrative Procedures Act and the Securities Exchange Act of 1934.”

Sonnenshein said the company believes US investors have expressed a desire to see Grayscale Bitcoin Trust (GBTC), Grayscale's flagship Bitcoin fund, converts to a Bitcoin spot. The GBTC fund is currently trading at a discount or premium of -29%, according to Ycharts.

Grayscale launched a comment campaign during a 240-day review period. As a result, there were more than 11,400 responses with more than 99% supporting the fund conversion.

“We are extremely disappointed and completely disagree with the decision to continue to decline the funds SEC spot market into the United States.”

The argument revolves around the fact that the SEC approved the futures contracts but are still based on spot market prices.

Time of the lawsuit

Bloomberg's James Seyffart tweeted a potential timeline of events following the lawsuit, which could be pulled out over the next few years.

“Will have to retweet this as Grayscale has filed a lawsuit against the SEC for denying GBTC under the Administrative Procedure Act (APA). This is our *estimate* timeline of events provided by Elliott Z. Stein. But things are moving fast.”

Bitcoin price has continued to slide, dropping another 2,99% on the day and dropping to $19,385 at press time.

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Source: TradingView

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