Grayscale Investments has launched legal proceedings against the United States Securities and Exchange Commission (SEC). Grayscale, the world’s largest digital asset manager, had opened legal proceedings against the SEC for denying its application for a spot Bitcoin exchange-traded fund (ETF).
Grayscale opens legal case against SEC
Grayscale filed an application with the SEC last year to have the Grayscale Bitcoin Trust (GBTC) converted into a spot Bitcoin exchange-traded fund (ETF). On Wednesday, the asset manager announced that its senior legal strategist, Donald B. Verrilli Jr., who previously served as a former US solicitor general, had filed a petition with the US Court of Appeals for the District of Columbia Circuit.
The Grayscale legal strategist said that the SEC was acting “arbitrarily and capriciously” and failed to treat all investment vehicles in the same way. The regulatory body also plans to pursue a legal challenge following the SEC’s failure to comply with the Securities Exchange Act (SEA) and the Administrative Procedure Act (APA).
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Grayscale is the largest digital asset manager with $12.92 billion in assets under management in the GBTC product. The company filed an application on October 19, 2021, to have the GBTC converted into a spot Bitcoin ETF. However, the SEC has failed to approve this application.
The SEC issued a statement on June 29 saying that Grayscale’s application for a spot ETF was denied “to protect investors and the public interest” because the proposal failed to illustrate the design and to prevent practices of fraud and manipulation.
Grayscale is filing this lawsuit a week before the deadline set for July 6. It was also filed the same day that the Bitwise Bitcoin exchange-traded product (ETP) was rejected. The CEO of Grayscale, Michael Sonnenshein, issued a statement saying the company disagreed with the SEC’s move to deny its ETF application.
The lawsuit will take time
The ETF analyst at Bloomberg Intelligence, James Seyffart, issued a statement saying that while the lawsuit had been filed by Grayscale, it would take the courts until the third quarter of 2023 or the first quarter of 2024. Therefore, the application could take time before being approved.
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Source: https://insidebitcoins.com/news/grayscale-to-open-a-legal-case-against-sec-for-rejecting-spot-bitcoin-etf