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Grayscale Mulls Lawsuit Against SEC if Bitcoin Spot ETF Gets Rejected

2 mins
Updated by Kyle Baird
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In Brief

  • Grayscale CEO Michael Sonnenshein made the remark in an interview with Bloomberg.
  • The SEC deadline for a decision on the Grayscale Bitcoin ETF is July 6.
  • The SEC has not approved any spot ETFs, though it has approved futures-based ETFs.
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Grayscale may go so far as to file a lawsuit against the U.S. SEC if the latter does not approve its bitcoin spot ETF. CEO Michael Sonnenshein said the option was on the table in an interview with Bloomberg.

Digital asset management firm Grayscale may consider filing a lawsuit against the United States Securities and Exchange Commission (SEC) if it rejects its bitcoin ETF application. The SEC is expected to make a decision on the application by Jul. 6. Grayscale CEO Michael Sonnenshein revealed that it could happen in an interview with Bloomberg News on March 28.

Grayscale runs a $30 billion bitcoin trust that has been very successful. The firm itself is one of the largest of its kind on the market, with over $40 billion in assets under management. It filed the bitcoin ETF application in October 2021, and the SEC delayed the ruling to February 2022.

Sonnenshein said that “all options are on the table.” One of the arguments posited was that investors who do not have spot products would turn to futures-based products, which are by nature riskier. He was optimistic on the whole, however, saying that it was a matter of when, not if, a spot bitcoin ETF would be approved.

Grayscale has also filed for an ETF that would track fintech firms. This has not received approval yet, but it is far more likely to receive approval than an ETF tracking bitcoin directly.

SEC under pressure to approve ETFs

The SEC has not approved any direct bitcoin ETF so far, despite numerous applications. It has been quite adamant about its stance on crypto ETFs and believes that there needs to be better investor protection measures in place.

However, crypto enthusiasts have urged the SEC to make a positive decision, saying that approval would legitimize the market and actually protect investors further. The Grayscale Bitcoin ETF in particular has seen a lot of letters sent to the SEC, asking for approval. The company urged investors to comment on the application, and it appears to have worked.

Futures-based ETFs have had more support from the SEC, but investors are keen on a spot ETF. The ProShares Bitcoin Strategy ETF has done phenomenally well since its launch, but it’s clear that the market wants more.


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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance...