Grayscale has announced a legal challenge against the recent rejection of its application to convert its Grayscale Bitcoin Trust (GBTC) into a Bitcoin spot exchange-traded fund (ETF) by the US Securities and Exchange Commission.
He announced that his chief legal strategist, former United States Attorney General and partner at Munger, Tolles & Olson, Donald B. Verrilli, Jr., had filed a petition for review with the United States Court of Appeals for the District Circuit. of Columbia.
According to a June 29 statement from the securities regulator, the request was disapproved “to protect investors and the public interest” because the proposal failed to demonstrate how it is “designed to prevent fraudulent and manipulative acts and practices.”
A similar decision was also made in relation to Bitwise’s exchange-traded product (ETP) on Wednesday, citing the same reasons.
Grayscale Investments, which has $12.92 billion in assets under management in its GBTC, had been awaiting an SEC decision to convert its flagship Bitcoin trust into a spot ETF since filing with the regulator on Oct. 19, 2021.
The decision comes a week before the July 6 deadline.
Earlier this month, Grayscale announced that it had hired a former United States Attorney General, Donald B. Verrilli Jr., in preparation for a potential legal dispute with the SEC over his application if it were denied.
Other attorneys on the Grayscale legal team include Davis Polk & Wardwell LLP and their in-house counsel, including Craig Salm, who is currently General Counsel.
In March, Grayscale CEO Michael Sonnenshein told Bloomberg that his company would consider filing an Administrative Procedure Act (APA) lawsuit if the financial regulator rejected its cash ETF application. of Bitcoin.
On Wednesday, James Seyffart, an ETF analyst at Bloomberg Intelligence, told his 19,400 Twitter followers that the SEC’s decision on both ETFs came sooner than he thought, but that both were expected.
Wellp. There it is. Certainly earlier than I expected but the decision was as expected. BOTH @Grayscale‘s $GBTC and @BitwiseInvest‘s spot #bitcoin ETFs were “Disapproved” by the SEC today. https://t.co/9w8ouQuSfk pic.twitter.com/Irrrwznr5T
— James Seyffart (@JSeyff) June 30, 2022
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