Grayscale has a 70% chance of prevailing against the SEC


Elliot Stein, a Bloomberg analyst, provided commentary on Grayscale’s lawsuit against the SEC.

The analyst provided his analysis of Grayscale’s lawsuit against the Securities and Exchange Commission regarding the SEC’s rejection of an application for a spot Bitcoin ETF.

Stein disclosed that in the most recent hearing, held on March 7, Grayscale argued that the SEC’s standards were inconsistent because they approved applications for a Bitcoin futures ETF but consistently rejected applications for a spot bitcoin ETF.

Since the underlying assets for both products are the same and derive their value from Bitcoin, Grayscale argues that the Wall Street regulator should treat the products similarly, but this is not the case.

Grayscale has claimed that the regulator’s actions are arbitrary and capricious, violating federal law in the United States.

The SEC argued that it had applied the same standards despite the different products. According to the SEC, the Bitcoin futures market is governed by the CFTC, which distinguishes it from the spot BTC ETF, which lacks regulatory oversight in their view.

Before the hearing, Elliot Stein believed that the SEC had the upper hand in the lawsuit and that their chances of victory were significantly greater than those of the GBTC issuer, given that courts tend to defer to federal agencies because they are experts in their respective fields.

SEC v. Ripple, which focuses on XRP’s purported status as a security, and the SEC’s lawsuit against former Coinbase manager Ishan Wahi, in which the regulator designated nine of the tokens involved in the case as securities, are examples of such instances.

Finally, Stein emphasized that the action against Terraform Labs would affect how the regulator treats stablecoins.

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