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Grayscale Investments, the manager of the world’s largest BTC fund—the Grayscale Bitcoin Trust (GBTC), has filed a lawsuit to challenge the Securities and Exchange Commission’s (SEC) rejection of its spot BTC exchange-traded fund (ETF) application.

In a press release announcing the initiation of the lawsuit, the asset manager explained its grievances with the U.S. securities regulator. The firm argued that it has voluntarily filed registration statements, subjected its products to increased oversight, and provided industry-standard information disclosure and risk factors warning for investors.

According to Michael Sonnenshein, Grayscale’s CEO, the company believes in the SEC’s mandate to “protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation,” but it can no longer condone the SEC’s denial of spot BTC ETFs in the U.S. market.

The lawsuit argues that the SEC’s latest rejection of its bid to convert its GBTC fund to a spot BTC ETF amounts to a violation of both the Administration Procedure Act and the Securities Exchange Act of 1934.

“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,” Grayscale’s senior legal strategist Donald B. Verrilli stated.

The lawsuit to review the SEC ruling has been filed with the United States Court of Appeals for the District of Columbia Circuit.

Grayscale had previously stated that it would take such a route if the SEC failed to approve its application back in February when the SEC called for public comments on the matter.

Grayscale also started a campaign for the public to easily reach the SEC at the time. The asset manager reports that around 99% of the over 11,400 comments the campaign garnered were positive.

The SEC’s run with spot BTC ETFs

The SEC rejection of Grayscale’s spot BTC application only adds to the commission’s long tally of denials to the industry. This year, it has dashed out spot BTC ETF applications from NYDIG, Global X, Fidelity, and Wisdom Tree, to mention a few.

The SEC has maintained that the market is not mature enough and does not have adequate market manipulation and fraud prevention measures to protect consumers. However, market participants and digital assets sympathizers have argued that the approval of several BTC futures ETFs disapprove the SEC’s claims.

Recently, SEC Commissioner Hester Pierce, a long-time supporter of digital assets adoption, also criticized the commission’s continued refusal to approve the highly demanded spot BTC ETFs.

Watch: SEC Commissioner Hester Peirce on Bitcoin Association’s Blockchain Policy Matters

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