Grayscale Threatens SEC with Legal Action if Bitcoin ETF is Rejected

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SEC is Procrastinating Grayscale Bitcoin ETF Approval

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CEO Michael Sonnenshein said Grayscale may sue the Securities and Exchange Commission if it continues to block the establishment of a spot Bitcoin ETF.

Nearly a year ago, the world’s biggest digital currency asset manager sought to transform its flagship trust into a Bitcoin ETF.

After years of denials, Grayscale is certain the SEC will finally approve Bitcoin spot ETFs.

When asked whether Grayscale would contemplate an Administrative Procedure Act lawsuit if its proposal to convert the Grayscale Bitcoin Trust (GBTC) into an ETF was refused, Sonnenshein stated, “I believe all options are on the table.”

The world’s biggest digital currency asset management applied to convert its flagship trust in April 2021, Sonnenshein stated. However, no applications for a spot product have been authorized since then.

“The Grayscale team has been putting the full resources of our firm behind converting GBTC, our flagship fund, into an ETF,” Sonnenshein said. “It’s really important that investors know that we have and will continue to advocate for them.”

Concerning a Bitcoin spot ETF, the SEC is presently collecting public input. The agency has given issuers, investors, and other interested parties until early July to make comments.

Grayscale has created an education page and contact form on their website to encourage investor feedback.

The SEC’s principal concern in certifying a spot product is market manipulation.

“When assessing Bitcoin spot ETPs, the commission must apply all Exchange Act standards,” SEC Chair Gary Gensler stated. “In particular, the commission must consider if the bitcoin spot ETP proposal is designed to prevent fraudulent and manipulative acts and practices.”

“Ultimately, we believe it’s a matter of when not a matter of if a spot Bitcoin ETF is approved,” Grayscale CEO Michael Sonnenshein said.

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