With the US Securities and Exchange Commission (SEC) hesitant to approve a Bitcoin spot exchange traded fund (ETF) application, one of the companies whose application is before the regulator has revealed that if the agency continues to reject applications, it may be willing to sue.
All possibilities are on the table
In a Bloomberg Markets interview, Grayscale CEO Michael Sonnenshein stated that all options are on the table, including legal action against the SEC. This is in response to the firm’s efforts to transform its Bitcoin Trust into an ETF.
Sonnenshein responded that he believes all avenues are accessible when asked if his firm would analyse the effectiveness of an Administrative Procedure Act lawsuit. If the commission declines Grayscale’s request to convert its Trust to an ETF, the company may chose to sue.
Given that it has already denied a number of applications, the commission may view this communication as a threat. Fidelity, First Trust, NYDIG, and VanEck, to name a few, have all had spot Bitcoin ETF applications denied by the commission.
Grayscale applied to convert its trust into a Spot Bitcoin ETF for the first time in April 2021. This application was based on the SEC’s acceptance of futures-traded Bitcoin funds, but all of the applications were denied by Gary Gensler’s commission.
Grayscale recently requested its investors to write the commission in order for the company’s application to be approved. In addition, the firm has created a page on its website dedicated to providing information on the ETF as well as accepting submissions of the aforementioned viewpoints.
The Securities and Exchange Commission (SEC) is seeking public input on exchange-traded funds (ETFs)
The SEC has requested stakeholders to submit their ideas and thoughts on spot ETFs as part of its reaction to the slew of spot ETF applications before it. The commission has set a 240-day window in which the opinions must be submitted.
The SEC had previously asserted in rejecting previous spot applications that this type of investment was vulnerable to market manipulation, putting investors’ assets at risk.
Many in the industry, however, disagree with this assessment, claiming that the company’s approved Futures application also puts investors’ money at risk.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.