Grayscale launches legal challenge against SEC for Bitcoin spot ETF rejection as the company is deeply disappointed. It believes that the latest decision shows that the SEC is acting “arbitrarily and capriciously” by “failing to apply consistent treatment to similar investment vehicles.”
Grayscale Investments filed a lawsuit against the US Securities and Exchange Commission (SEC) after it was denied its application to transform the Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin (BTC) exchange-traded fund (ETF), according to Cointelegraph.
It announced that its senior legal strategist, former U.S. solicitor general Donald B. Verrilli Jr., had filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit. Verrilli said the latest ruling shows the SEC is acting “arbitrarily and capriciously” by “failing to apply consistent treatment to similar investment vehicles,” and will be pursuing a legal challenge based on the SEC's alleged violation of the Administrative Procedure Act (APA) and Securities Exchange Act (SEA).
Grayscale Investments had been waiting on a decision from the SEC to convert its flagship Bitcoin trust into a spot-based ETF since filing its application to the regulator on October 19, 2021. According to the regulator, the application was rejected “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.”
Michael Sonnenshein, Grayscale's CEO, in a statement on Wednesday, said they were “deeply disappointed” and “vehemently disagree” with the SEC's decision to deny their application. “We will continue to leverage the full resources of the firm to advocate for our investors and the equitable regulatory treatment of Bitcoin investment vehicles,” he said.
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Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.