Grayscale has filed to launch a futures-based Ethereum exchange-traded fund (ETF).

According to the Wall Street Journal, Grayscale has filed for an Ethereum (ETH) futures trading fund (ETF). This latest application was filed under the Securities Exchange Act of 1933, the same regulatory framework that governs commodities and Bitcoin (BTC) ETFs.

Previously, Grayscale also applied for an Ethereum futures ETF under the Investment Company Act of 1940 — the law that regulates most security-based ETFs. This is an important distinction according to the report since the SEC has approved bitcoin futures ETFs under both laws.

Grayscale vs. SEC

Grayscale, the manager of the world’s largest Bitcoin fund, has been involved in a legal battle with the US Securities and Exchange Commission (SEC) over its request to convert its investment vehicle, Grayscale Bitcoin Trust (GBTC), into a publicly traded company. Exchange Traded Fund (ETF).

The SEC initially rejected Grayscale’s proposal, citing concerns about investor protection from fraudulent and manipulative practices. The agency said the proposed ETF did not do enough to protect ordinary investors from potential risks in the Bitcoin market.

In response to the SEC’s denial, Grayscale criticized the agency’s position as “irrational” and “discriminatory.” They argued that the SEC’s reasoning was inconsistent, as they have used similar arguments to reject several bitcoin-focused ETFs in the past.

To support Grayscale’s case, four affiliates, the Blockchain Community, Chamber of Digital Commerce, Chamber of Progress, and Coin Center, filed an amicus curiae, a legal brief from a non-litigating party that provides additional information or arguments to the court. These affiliations expressed support for Grayscale and criticized the SEC’s decision.

However, in recent events, Grayscale has scored a major victory in its legal battle against the SEC. A panel of three federal judges in Washington overturned the SEC’s decision, allowing Grayscale to start building a bitcoin ETF.

Grayscale’s legal battle against the SEC revolves around their desire to convert their Bitcoin investment vehicle into an ETF. While the SEC initially rejected their proposal, Grayscale was pushing back, criticizing the agency’s position and garnering support from across affiliations. With the recent court ruling in their favor, Grayscale can move forward with their plans for a Bitcoin exchange-traded fund.