Grayscale Sues SEC for Denying its Proposed Spot Bitcoin ETF

One of the world’s most prominent digital asset managers filed a lawsuit against the US Securities and Exchange Commission (SEC) shortly after the agency on Wednesday denied its request to turn its flagship bitcoin trust into an exchange-traded fund (ETF). Grayscale Investments said in a statement on its website, “We are deeply disappointed by and do not agree with its decision.” The same day, the SEC also turned down Bitwise’s request for a spot bitcoin ETF. SEC Rejected Grayscale’s Request The SEC rejected Grayscale’s request to establish a spot bitcoin ETF on the NYSE Arca exchange in a decision on Wednesday. According to the regulator, the proposed ETF did not adhere to the criterion intended to thwart dishonest and manipulative actions and safeguard investors and the general welfare. According to a petition for review filed on Wednesday, Grayscale is contesting the SEC’s judgment and has requested the US Court of Appeals for the District of Columbia Circuit to look into it. Grayscale submitted its initial application in October 2021, the same month the New York Stock Exchange authorized trading in the first bitcoin futures-based ETF. The first companies in the market were ProShares, Valkyrie, and VanEck. Grayscale CEO Expressed Faith in SEC If the SEC continued to forbid a spot crypto ETF, the asset manager threatened legal action against the agency in March. In June, the company hired Donald B. Verrilli, Jr., a former US...