Grayscale Investments is suing the SEC for denying its application to convert GBTC into an ETF. The filing was submitted yesterday evening by the former top legal mind that served in the Obama administration as U.S. solicitor general.Over 11,000 comment submissions were sent to the SEC by investors, 99% of which were positive towards the transition of GBTC into an ETF.
Grayscale Investments, one of the world’s largest digital asset managers, is suing the U.S. Securities and Exchange Commission (SEC) after the regulator denied its application to convert its flagship bitcoin fund, GBTC, into an exchange-traded fund (ETF), per a press release
“As Grayscale and the team at Davis Polk & Wardwell have outlined, the SEC is failing to apply consistent treatment to similar investment vehicles, and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934,” said Donald B. Verrilli Jr., Grayscale’s senior legal strategist and former U.S. solicitor general.
Verrilli was announced as a new member of Greyscale’s legal team on June 7, as the company had been preparing for a worst-case scenario. Grayscale also began a letter campaign with investors where over 11,400 total submissions were sent to the SEC, 99% of which were in favor of the fund’s transition to an ETF.
“Through the ETF application review process, we believe American investors overwhelmingly voiced a desire to see GBTC convert to a spot Bitcoin ETF, which would unlock billions of dollars of investor capital while bringing the world’s largest Bitcoin fund further into the U.S. regulatory perimeter,” said Michael Sonnenshein, Grayscale’s CEO.
Grayscale announced its intentions to transition the fund into an ETF in April 2021. A formal request to do so was then submitted later that year, in October. Since then, Grayscale has mounted many efforts to properly inform the public of its intentions and to meet all regulatory requirements.
While the SEC has a 240-day deadline to make decisions on these matters, which would have ended July 6, it can issue decisions early. Even though some may hear this news as disheartening, the forced litigation of the matter could create a standing precedent for the ecosystem that might be beneficial in the long-term.
Source: https://bitcoinmagazine.com/legal/grayscale-is-suing-the-sec-for-denying-its-spot-bitcoin-etf
