Grayscale Ramps Up Efforts Against SEC For Rejecting Bitcoin ETF
Crypto asset management company Grayscale has filed the opening brief in its lawsuit against the U S. Securities and Exchange Commission (SEC), challenging the agency's decision to deny its application to convert the GBTC into a spot Bitcoin ETF.
Grayscale, which has been trying to convert its flagship Grayscale Bitcoin Trust fund (GBTC) into a spot BTC ETF for years, called the SEC's decision “arbitrary, capricious, and discriminatory" in an opening legal brief filed on Tuesday.
As reported, the SEC denied Grayscale’s application on June 29, citing fraudulent and manipulative acts and practices and concerns regarding user protection.
Subsequently, Grayscale Senior Legal Strategist Donald B. Verrilli, who was formerly U.S. Solicitor General and partner at Munger, Tolles & Olson, filed a petition for review to initiate the litigation process.
The opening brief explains the legal basis for Grayscale’s arguments, arguing that the "test the SEC has applied to Bitcoin-related ETFs, and only Bitcoin-related ETFs, is flawed and has been inconsistently applied with a “special harshness” to spot Bitcoin ETFs."
“That stark arbitrariness cannot be justified or reconciled with the Commission’s mandate to treat like cases alike. Rather, it can be only understood as a substantive judgment on the merits of a spot Bitcoin investment — the kind of substantive judgment that is outside the Commission’s authority,” the brief reads.
The brief also mentioned that the SEC has approved several Bitcoin futures ETFs since October 2021, when the agency gave the green light for the first-ever Bitcoin-related ETF. It then argued that the spot price of Bitcoin in both spot and futures ETFs is subject to the same risks, and thus it doesn't make sense to
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