Grayscale Investments has launched a legitimate challenge from the U . s . States Registration (SEC) after being denied its application to transform its Grayscale Bitcoin Trust (GBTC) right into a place-based Bitcoin (BTC) exchange-traded fund (ETF).
On Wednesday, it announced that it is senior legal strategist, former U.S. solicitor general Jesse B. Verrilli Junior., had filed a petition for review using the U . s . States Court of Appeals for that District of Columbia Circuit.
Verrelli mentioned the latest decision implies that the SEC is acting “arbitrarily and capriciously” by “failing to use consistent treatment to similar investment vehicles” and will also be going after a legitimate challenge in line with the SEC’s alleged breach from the Administrative Procedure Act (APA) and Securities Exchange Act (Ocean).
Grayscale Investments, that has $12.92 billion of assets under management in the GBTC, have been waiting on the decision in the SEC to transform its flagship Bitcoin trust right into a place-based ETF since filing its application towards the regulator on October 19, 2021.
Based on a filing in the securities regulator on Wednesday, the applying was disapproved “to safeguard investors and also the public interest” since the proposal unsuccessful to show how it’s “designed to avoid fraudulent and manipulative functions and practices.”
The choice arrived on the scene a complete week prior to the This summer 6 deadline and came on the day that like a similar rejection of Bitwise’s Bitcoin exchange-traded product (ETP).
Michael Sonnenshein, Grayscale’s Chief executive officer, inside a statement on Wednesday, stated these were “deeply disappointed” and “vehemently disagree” using the SEC’s decision to deny their application.
We’ve filed a suit from the SEC. $GBTC
— Sonnenshein (@Sonnenshein) June 30, 2022
“We continuously leverage the entire sources from the firm to advocate for the investors and also the equitable regulatory management of Bitcoin investment vehicles,” he stated.
Addressing his 19,400 Twitter supporters, James Seyffart, an ETF analyst at Bloomberg Intelligence, stated that although the suit continues to be filed, a court ruling around the matter isn’t expected until Q3 2023 to Q1 2024, and therefore we might avoid seeing the GBTC moving forward in the near future.
Gonna retweet this because Grayscale has filed their APA suit for that $GBTC denial. Here’s our *believed* timeline of occasions thanks to @NYCStein. But situations are moving fast. https://t.co/ql8a43W5vs
— James Seyffart (@JSeyff) June 30, 2022
Grayscale have been preparing its legal team for any potential spat using the SEC. Earlier this year, the firm hired Jesse B. Verrilli Junior., a former U.S. solicitor general, to participate its legal selection.
Other attorneys in Grayscale’s legal line-up include attorneys at Davis Polk & Wardwell LLP and it is in-house counsel, including Craig Salm, who can serve as chief legal officer.
Related: Grayscale reports 99% of SEC comment letters support place Bitcoin ETF
In March, Grayscale Chief executive officer Michael Sonnenshein told Bloomberg that his firm would think about a suit underneath the Administrative Procedure Act (APA) if the application because of its Bitcoin Place ETF be denied through the financial regulator.
