Court to decide on Grayscale bitcoin ETF by Q3

abdelaziz Fathi

Grayscale CEO Michael Sonnenshein anticipates that the court may decide by the third quarter whether to overturn the SEC’s rejection of its application to convert its Bitcoin trust into a spot exchange-traded fund.  

Grayscale

Although Sonnenshein did not comment on whether he anticipates a favorable ruling, he said Grayscale will seek to appeal the decision up the Supreme Court if the case is unsuccessful. And if that also fails, the firm will discuss the possibility of getting relief from tender offer rules with the SEC. On the other hand, Grayscale plans to work closely with the SEC to expedite the conversion process if the decision comes in their favor, CEO reiterated at CoinDesk’s Consensus 2023 conference.

The crypto hedge fund told the court overseeing its lawsuit against the Securities and Exchange Commission that nothing justifies the agency’s arbitrary disapproval of the proposed spot-bitcoin ETP.

Replying to a brief filed by the SEC, Grayscale said that denying a proposal for a different spot bitcoin exchange-traded product is “illogical.”

The SEC has sent a letter to the U.S. Court of Appeals for the District of Columbia Circuit, notifying it of its recent order regarding the VanEck Bitcoin Trust. The letter states that the order addresses “relevant issues” related to the case, digging into the agency’s basis for denying Grayscale’s application to establish a Bitcoin ETF.

According to the attorney representing Grayscale, the SEC is using evidence and reasoning from the VanEck order, which is not part of the official record, in an attempt to justify its denial. This is known as “post hoc” reasoning, Verrilli said in a letter addressing the SEC’s recent order regarding the VanEck Bitcoin Trust.

He further argued that the VanEck order’s observation of a potential mixed or bi-directional relationship between bitcoin spot and futures prices does not disprove the 99.9% correlation that exists between these two markets. The letter stated that the SEC’s attempt to use the VanEck order to rationalize its decision regarding Grayscale’s bitcoin products is not permissible as it has not provided evidence that Grayscale’s claims are wrong.

Finally, the attorney pointed out that the SEC’s letter failed to acknowledge that the VanEck order was issued despite the dissent of two of its commissioners.

In June 2022, the company running the world’s biggest bitcoin fund sued the SEC after the agency rejected a bid to turn its investment vehicle into a fund that trades on major Wall Street exchanges.

Read this next

Digital Assets

Crypto.com shuts down its US institutional exchange

Crypto.com has announced plans to discontinue its institutional exchange service for professional customers in the United States as soon as June 21.

Retail FX

ThinkMarkets launches copy trading platform ‘ThinkCopy’

Melbourne-based broker, ThinkMarkets has introduced ThinkCopy, a copy trading platform that aims to provide clients with access to experienced traders and a range of social features.

Retail FX

Robinhood delists Solana, Cardano, and Polygon amid SEC’s crackdown

Commission-free brokerage Robinhood Markets announced on Friday that it would be delisting three crypto tokens from its platform. The decision comes shortly after the U.S. regulators intensified its regulatory actions against major cryptocurrency exchanges.

Digital Assets

US wants Bittrex to settle federal dues before compensating customers

The U.S. government has raised objections to Bittrex’s proposal to compensate its customers, adding to concerns about the resolution of the crypto exchange’s bankruptcy case.

Digital Assets

Binance prepares to suspend US dollar funding after SEC crackdown

Binance.US said it will temporarily suspend US dollar deposits and provided customers with a deadline to withdraw their fiat balances. This decision comes after the US Securities and Exchange Commission (SEC) filed a lawsuit requesting the freezing of Binance’s assets in the country.

Digital Assets

Januar launches real-time payments network to fill gap made by Silvergate and Signature

“To all the entrepreneurs and innovators out there is a clear message: if you are a legitimate European business working with crypto then Januar is here to provide you with the account and payment infrastructure you need to operate successfully and build the financial system of tomorrow.”

Retail FX

Exness’ active clients top 515K as monthly volume hits $3.35 trillion

FX trading volumes are climbing again as economic uncertainty spurred by recent developments over central banks’ policies encouraged speculators to pile back into the market.

Technology

Danske Bank plans signficant investment in digital platforms

“We have decided to significantly increase our investments in our digital platforms, expert advisory services and sustainability, focusing on the areas where we see the best opportunities for profitable growth.”

Digital Assets

ERD DeFi Lending Platform and USDE Stablecoin Unveiled at EDCON 2023

ERD, the Ethereum Reserve Dollar, is a decentralized lending platform and stablecoin that aims to provide a capital-efficient, decentralized, and stable solution to the challenges faced by the stablecoin industry, introducing a minimum collateralization ratio of 110% and a robust liquidation mechanism.

<