CEO says Grayscale-U.S. SEC lawsuit could be ruled within a year
Grayscale Investments’ lawsuit against the US Securities and Exchange Commission for overturning a digital asset manager’s proposal to create a spot bitcoin exchange-traded fund will be settled within a year, the company’s chief executive said Thursday.
Regulator ruled late Wednesday That the offer does not meet standards designed to prevent fraudulent practices and protect investors.
Grayscale is looking to convert its Grayscale Bitcoin Trust, the world’s largest bitcoin fund, into an ETF to be listed on Intercontinental Exchange Inc.’s NYSE Arca Exchange.
The SEC rejected more than a dozen spot bitcoin ETF applications over the past year, and approved several bitcoin futures-based ETFs. The rejection has focused applicants on the spot fund’s lack of watchdog-sharing agreements with regulated markets related to the underlying assets.
“The SEC is acting arbitrary and cynical by continuing to approve bitcoin futures-based ETFs, while Spot continues to reject bitcoin ETFs,” Grayscale CEO Michael Sonnenshine said in an interview with CNBC.
Grayscale sued the SEC almost immediately after its rejection, and because the defendant is a regulator, the case goes directly to appellate court and a decision must be made within nine to 12 months, Sonnenshin said.
The SEC, which also rejected a spot bitcoin ETF proposal by Bitwise on Wednesday, declined to comment.
Other issuers of spot bitcoin ETFs rejected by the SEC in recent months include Fidelity, Skybridge and Valkyrie.
Bitcoin price dropped from the $20,000 milestone to $18,736 on Thursday, lower than the volatile asset’s 18-month low of $17,592 on June 18. Bitcoin reached a record high of $69,000 in November.
The regulator said the SEC’s rejection of Grayscale’s application “does not reflect an assessment of the usefulness or value of bitcoin, or blockchain technology more generally, as an innovation or investment.”