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Usha Yadav
Jun 30, 2022
by Usha Yadav

Grayscale Sues SEC for Denying its Proposed Spot Bitcoin ETF

SEC Grayscale

Table of contents

  1. SEC Rejected Grayscale's Request
  2. Grayscale CEO Expressed Faith in SEC
One of the world's most prominent digital asset managers filed a lawsuit against the US Securities and Exchange Commission (SEC) shortly after the agency on Wednesday denied its request to turn its flagship bitcoin trust into an exchange-traded fund (ETF). Grayscale Investments said in a statement on its website,
"We are deeply disappointed by and do not agree with its decision."

The same day, the SEC also turned down Bitwise's request for a spot bitcoin ETF.

SEC Rejected Grayscale's Request

The SEC rejected Grayscale's request to establish a spot bitcoin ETF on the NYSE Arca exchange in a decision on Wednesday. According to the regulator, the proposed ETF did not adhere to the criterion intended to thwart dishonest and manipulative actions and safeguard investors and the general welfare.

According to a petition for review filed on Wednesday, Grayscale is contesting the SEC's judgment and has requested the US Court of Appeals for the District of Columbia Circuit to look into it. Grayscale submitted its initial application in October 2021, the same month the New York Stock Exchange authorized trading in the first bitcoin futures-based ETF. The first companies in the market were ProShares, Valkyrie, and VanEck.

Grayscale CEO Expressed Faith in SEC

If the SEC continued to forbid a spot crypto ETF, the asset manager threatened legal action against the agency in March. In June, the company hired Donald B. Verrilli, Jr., a former US solicitor general, as a senior legal strategist to bolster its legal department.

In a statement to investors earlier this week, Grayscale CEO Michael Sonnenshein expressed confidence in the anticipated SEC ruling. He claimed that the regulator's activities over the previous eight months demonstrated that it was becoming more familiar and at ease with the fundamental bitcoin market.

The asset management will likely argue that bitcoin-based ETF products must receive fair treatment from the SEC. In the previous month, Bitcoin has decreased by more than 37%.

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Grayscale Sues SEC for Denying its Proposed Spot Bitcoin ETF
Usha Yadav
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

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