Following the SEC’s rejection of Grayscale’s proposal to convert its popular GBTC to a spot BTC ETF, the asset management firm has announced its intention to take legal action against the US SEC.
Grayscale And The US SEC’s Unending Battle
On Wednesday, US financial watchdog, the SEC, rejected Grayscale’s proposal for converting its GBTC to a spot BTC ETF. However, the asset management firm isn’t taking decisions lightly. Hence, it announced that it would institute legal action against the SEC.
Grayscale has already taken the first step in pursuing a legal case against the SEC. It has filed a motion of appeal with the District of Columbia Court of Appeals. The appeal will seek to review SEC’s rejection decision.
A few months ago, Grayscale (through its CEO, Michael SSonnenshein) stated that it would seek legal redress if the SEC should reject its proposal again. Sonnenschein claimed that the company would file a motion under the administrative procedures act.
Grayscale CEO Claims Discrimination From SEC
It took SEC eight months to review Grayscale’s proposal. But during that period, the company performed a comment letter campaign. The campaign responses showed that many supported Grayscale’s bid to convert its GBTC to a spot BTC ETF.
The company claimed that 99% of the letter comments approved for Grayscale to push ahead with its proposal. With the SEC’s rejection, the company’s CEO, Michael Sonnenshein, has expressed his disappointment at the SEC’s decision.
Sonnenshein said he is surprised that the SEC keeps rejecting all spot BTC ETF proposals from being launched in the US market. According to him, the ETF proposal review process showed that nearly all US investors want Grayscale to convert its GBTC to a spot BTC ETF.
Sonnenshein claimed that a spot BTC ETF would bring the biggest BTC fund into the US environment. Also, the fund will unlock billions of dollars worth of investor capital into the US finance market. The Grayscale CEO added that the company would keep helping its customers to invest in the right bitcoin investment channels.
SEC Gives Reasons For Disapproving Grayscale’s Proposal
Before this announcement, many industry analysts claimed that the SEC would soon approve a spot BTC ETF for the US market. They backed their claims with various proof. However, the SEC has given its reasons for rejecting Grayscale’s proposal.
According to the financial regulator, a spot BTC ETF for the US market gives room for sharp practices in the crypto market. As it has done in the past, the SEC gives the same reasons for rejecting this proposal.
It repeated its statement that the lack of regulatory framework for the crypto market makes the US market unripe for a spot BTC ETF. However, the investment firm’s counterclaim was that the regulator’s excuse wasn’t valid. Since the SEC can approve BTC futures ETFs, it has no reason not to approve a spot BTC ETF.
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