On June 29, Wednesday, the U.S. Securities and Exchange Commission (SEC) denied Grayscale’s petition to transform its Grayscale Bitcoin Trust (GBTC) instrument to a spot Bitcoin.
Grayscale, the world’s biggest digital asset management company, eventually chose to take the Securities and Exchange Commission (SEC) to trial. “We have filed for legal action against the SEC,” said Michael Sonnenshein, Grayscale CEO.
Grayscale Investments’ lawyers have petitioned the District of Columbia Court to challenge the SEC’s judgment to refuse the transformation of its Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF.
Grayscale appealed in 2021 to turn its GBTC offering into a spot Bitcoin ETF in November. The last 240-day duration for assessment reconsideration expires this July 2022.
Sonnenshein commented on the recent denial and said that Grayscale understands and supports SEC’s stance to protect investors, keep markets transparent, orderly, and efficient, and enable wealth creation. However, he feels deeply disappointed by the SEC’s intention to continue the prohibition of spot Bitcoin ETFs entering the U.S. market.
The firm believes that during the ETF appeal for the assessment process, American investors predominantly expressed a wish to see GBTC converted to a spot Bitcoin ETF, as this might unlock billions of dollars of investor capital along with the world’s largest Bitcoin fund closer to the U.S. regulatory edges.
Spot Bitcoin ETF To Enter The Market This Year?
Given the SEC’s history of denying numerous large petitions, the securities watchdog may not allow this financial product to enter the market. Additionally, following large market liquidations and liquidity concerns, the SEC is expected to tighten its hold on the crypto regulatory domain.
Grayscale, on the other hand, is not so readily convinced. Grayscale Senior Legal Strategist Donald B. Verrilli, Jr. criticized the SEC for failing to apply “uniform regulation to identical financial products.”
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