The largest digital asset manager in the world, Grayscale, has finally made the decision to file a lawsuit against the U.S. Securities and Exchange Commission (SEC) over Bitcoin ETF issues. Michael Sonnenshein, the CEO of Grayscale, declared, “We’ve filed a lawsuit against the SEC.
The SEC’s decision to reject Grayscale Investments’ request to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF has been contested by attorneys for Grayscale Investments in a petition filed with the District of Columbia Circuit.
In November of last year, Grayscale submitted an application to have its GBTC product converted to a spot Bitcoin ETF. This July 2022 marks the completion of the 240-day final term for the review’s consideration.
Earlier, Grayscale made it clear that it might sue the SEC if it rejects its bitcoin ETF application.
A record-breaking 11,400+ comment letters were submitted to the SEC as a result of Grayscale’s campaign over the 240-day review period, with almost 99.0% of them favoring the conversion.
Grayscale said that it is deeply disappointed and vehemently disagrees with the SEC’s decision to keep preventing spot Bitcoin ETFs from entering the U.S. market. Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
The CEO said that the firm believes that American investors strongly expressed a desire for GBTC to become a spot Bitcoin ETF throughout the ETF application review process. This eventually would free up billions of dollars of investor capital while placing the largest Bitcoin fund in the world closer to the U.S. regulatory border.
The company revealed that it will keep using all of the firm’s resources to fight for the rights of its investors and fair regulatory treatment of Bitcoin investment vehicles.
Given the SEC’s history of turning down significant petitions, it is clear that the securities regulator is not in favour of this financial product entering the market. Furthermore, in light of significant market insolvencies and liquidity problems, the SEC is likely to increase its regulatory control over the cryptocurrency industry.
Grayscale, though, isn’t prepared to give up on this issue so quickly. Donald B. Verrilli, Jr., a senior legal strategist at Grayscale, charged that the SEC had failed to apply “consistent treatment to similar investment vehicles”. Verilli went on to say that they wanted to resolve this issue “productively and expeditiously”.
