• Grayscale is suing the Securities and Exchange Commission (SEC) for rejecting its application for a bitcoin exchange-traded fund (ETF).
• A federal appellate court judge is set to hear arguments regarding the case.
• The SEC has been hostile towards the crypto space, going after Kraken and threatening staking outlets.
Grayscale Lawsuit Against SEC
Earlier today, Alameda Research filed a lawsuit against Grayscale claiming that it was holding roughly $9 billion in investment funds that can (and should) be going to its many customers. In addition, Grayscale is also involved in a separate lawsuit against the Securities and Exchange Commission (SEC). The agency recently turned down the company’s application for a bitcoin exchange-traded fund (ETF), prompting Grayscale to file suit against them.
Appellate Court to Hear Case
A federal appellate court judge is now set to hear arguments regarding the case between Grayscale and the SEC. Donald Verrilli Jr., lead counsel for Grayscale, believes that “The most basic way in which an agency can act in an arbitrary and capricious manner is to take like cases…and treat them differently”. Many are eagerly awaiting the outcome of this case as a favorable ruling could legitimize crypto innovation in America like never before.
SEC’s Hostility Towards Crypto
The SEC has long had an antogonistic relationship with crypto companies, recently engaging in legal proceedings with Kraken which resulted in a $30 million penalty fee as well as ending their staking services. This caused many people to worry that all staking outlets would be targeted by the SEC, prompting Coinbase CEO Brian Armstrong to protect staking if necessary.
Inferior ETFs Allowed Within US Borders
Though an ETF has been allowed within American borders, it was not based on spot trading but rather futures governed under a 1940s law which analysts said did not encompass modern technology such as Bitcoin or blockchain.
Grayscale’s lawsuit against the SEC could have far reaching implications for legitimizing crypto innovation within America if ruled in favor of Grayscale. The outcome of this case will certainly be something worth keeping an eye on over the coming months.