Grayscale Will Sue if Their Bitcoin ETF is Denied

According to recent reports, Grayscale, a subsidiary of Digital Currency Group (DCG) and a cryptocurrency investment fund, plans to file a lawsuit against the United States Securities and Exchange Commission (SEC) on July 6 if their application for a Bitcoin exchange-traded fund (ETF) is denied.

At the 2022 Consensus event, which is now taking place in Austin, Texas, there have been debates on whether or not the United States Securities and Exchange Commission (SEC) will eventually approve a Bitcoin spot Exchange Traded Fund (ETF).

Assurance in the run-up to the deadline on July 6

David LaValle, Head of Global ETF at Grayscale, and Matt Hougan, Chief Investment Officer at Bitwise, are optimistic in spite of the attitude taken by the regulator and the recurrent rejection of a Bitcoin derivative product that directly follows the performance of Bitcoin.

Both companies are currently awaiting clearance of their Bitcoin ETF applications from the SEC.

Grayscale is have to wait until July 6 before receiving word from the SEC regarding the possibility of converting their Bitcoin Trust into an ETF, in contrast to Bitwise, which is scheduled to hear the response from the regulator on June 29. The Grayscale Bitcoin Trust (GBTC), which trades on public exchanges around the world, is the largest Bitcoin fund in terms of assets under management, with $19.2 billion (AUM).

In spite of Grayscale’s assurance, the company is expanding the size of its legal staff. Donald B. Verrilli Jr., a prominent attorney who has previous experience working with the United States government, was brought on board by the asset management company not too long ago. The attorney has an amazing list of past experience. During the Obama administration, he was a member of the Solicitor General’s office from 2011 to 2016.

Converting Grayscale’s Bitcoin Trust into an exchange-traded fund (ETF) appears to be one of their highest objectives and has become a matter of life and death for the company. The conversion will, among other things, release the $8 billion that is now held by the trust, which will greatly increase liquidity and, perhaps most crucially, extend access to Bitcoin. This is one of the most essential advantages of conversion. If this trust is converted into a Bitcoin spot ETF, then investors will benefit from increased levels of protection.

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Will the SEC Give Its Approval to Convert the Bitcoin Trust into an ETF?

Because of the stringent standards, it uses to evaluate applications, the SEC has not yet given its blessing to a Bitcoin spot ETF. Grayscale believes this action by the agency to have only approved a Bitcoin Futures ETF constitutes discrimination.

David LaValle is certain that their application will be approved by the SEC before the deadline of July 6, since he believes in the concept of positive advancement. Michael Sonnenshein, the CEO of Grayscale, agrees with him as well and supports his perspective.

Michael is of the opinion that the SEC’s perspective on Bitcoin has been shifting over time, which is encouraging for the industry as a whole.