Grayscale announced a legal challenge against the Securities and Exchange Commission’s latest rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC), into a spot-based Bitcoin exchange traded fund (ETF).
It also announced that the Senior Legal Strategist of its U.S. office, Donald B. Verrilli, Jr., had been appointed. Donald B. Verrilli Jr., the Solicitor General and partner at Munger Tolles & Olson had filed a petition to review the United States Court of Appeals in the District of Columbia Circuit.
According to a June 29 filing by the securities regulator, the application was rejected “to protect investors” and “the public interest” as it failed to show how it was “designed to prevent fraud and manipulative acts or practices.”
Similar decisions were made Wednesday about Bitwise’s Bitcoin exchange traded product (ETP), citing the same reasons.
Grayscale Investments has $12.92 Billion of assets under its GBTC management. Since October 19, 2021, Grayscale Investments had filed its application to regulators.
This decision is made a full week ahead of the July 6 deadline.
Grayscale had announced earlier this month that it had hired an ex-U.S. Attorney General. In preparation for possible legal disputes with the SEC, Solicitor General Donald B. Verrilli Jr.
Grayscale reports that 99% of SEC comments letters support spot Bitcoin ETF
Grayscale also has attorneys from Davis Polk & Wardwell LLP as well as its in-house counsel (including Craig Salm), who is the chief legal officer.
Grayscale CEO Michael Sonnenshein stated to Bloomberg in March that he would file a lawsuit under APA if the application for the Bitcoin Spot ETF was denied by the financial regulator.
James Seyffart from Bloomberg Intelligence, an ETF analyst, told his 19,400 followers on Wednesday that the SEC decision regarding both ETFs came sooner than he expected, but they were both expected.
Wellp. It is there. It was a little earlier than I expected, but it was the right decision. Today, the SEC disapproved @Grayscale’s $GBTC as well as @BitwiseInvest’s #Bitcoin ETF. https://t.co/9w8ouQuSfk pic.twitter.com/Irrrwznr5T
— James Seyffart (@JSeyff) June 30, 2022