Grayscale Investments has appointed a former U.S. Grayscale Investments has hired a former U.S. Solicitor General to prepare for a possible legal spat with U.S. Securities and Exchange Commission.
Since October 19, 2021, when the company filed its application to regulators, the company has been waiting for a decision by the SEC to convert its $19.8 billion Grayscale Bitcoin Trust to (GBTC) to a spot-based ETF.
Multiple times, the SEC has delayed its decision. Once in December and again February. The final decision is expected to be made on July 6.
Jake Chervinsky is the head of policy for the crypto advocacy group Blockchain Association. He stated that adding such firepower Grayscale’s legal team was “strong” and that the SEC would not be able to “survive a legal challenge” if they refused approval.
It was a strong move. @Grayscale means business. July 6th is the deadline for the SEC to approve or deny the request to convert GBTC into an ETF. It should be approved, there is no doubt about that. If the SEC is not approved, I don’t see how it can survive a legal challenge, especially one led Don Verrilli. Keep this in mind. https://t.co/ZbZ7oTXhHR
Jake Chervinsky (@jchervinsky), June 7, 2022
Grayscale CEO Michael Sonnenshein stated to Bloomberg in March that he would file a lawsuit under APA if the application for the Bitcoin Spot ETF was denied by the financial regulator.
He is a vocal critic for the regulator. The regulator approved ETF products that are crypto futures in October 2021, but has yet to approve ETF products that are spot equivalents.
Donald B. Verrilli Jr. is the new hire. He is an ex-U.S. He was the Solicitor General under Barack Obama’s administration from 2011 to 2016. He is currently a partner at Californian law firm Munger, Tolles & Olson and helped to establish its Washington D.C. Office.
Grayscale shared his Twitter account, stating that Grayscale was involved in over 50 cases before U.S. Supreme Court. These included several that were directly related to violations of the Administrative Procedure Act (APA).
He will be a senior lawyer strategist and work alongside Davis Polk & Wardwell LLP’s attorneys as well as its in-house counsel including Craig Salm who is the chief legal officer.
Don’s legal expertise is unparalleled. We could not ask for a better advocate to join @DavisPolkReg’s legal strategy team as we continue to push to convert $GBTC into a spot #Bitcoin Exchange Fund. https://t.co/ZruXc1aiQ6
Craig Salm (@CraigSalm), June 7, 2022
Grayscale described Verrilli, as one of the country’s most experienced lawyers with “deep understanding of legal theory and administrative procedure, as well the practical aspects of working with judiciary branches.”
“We are delighted that he has joined our team, as we strive towards a positive resolution to investors and the general population.”
We are now in the last month of our application to convert $GBTC into an ETF. As such, Donald B. Verrilli Jr., a former Solicitor General for the United States, has been retained as additional legal counsel. Here’s a short explanation:
— Grayscale (@Grayscale) June 7, 2022
Citadel Securities, a market maker who could provide liquidity to crypto ETFs like the one proposed by Grayscale on Tuesday, said that it is open to supporting crypto-related ETFs but will not do so without approval from regulators.
Kelly Brennan, head of Citadel ETF, stated that while they will be available if those products are approved by the FDA, she is taking a more measured approach.
Market makers are the key liquidity providers for the ETF ecosystem. They ensure efficient and continuous ETF trading.
Related: Why the US needs a spot Bitcoin ETF: 21Shares CEO
ETFs that are crypto-linked have gained popularity around the globe. According to ETF research firm ETFGI, global assets in crypto ETFs (ETPs) reached $16.28 billion at the end of Q1 2022.
Canada launched its first ever Bitcoin ETF in February 2021. The Purpose Bitcoin ETF was created by Canada. It became one of the first countries to adopt a spot Bitcoin ETF.
Australia launched its first spot cryptocurrency ETFs on May 12. This included a Bitcoin ETF by Cosmos Asset Management and spot ETFs for Ether (ETH), both from 21Shares. Two additional crypto-backed ETFs launched Monday, June 6.
Grayscale started trading its first European ETF in May. It is called Grayscale Future of Finance UCITS. The ETF has listings on Borsa Italiana, the London Stock Exchange and Borsa Italiana.
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