Grayscale Investments has hired a former US Attorney General in preparation for a possible legal dispute with the US Securities and Exchange Commission (SEC) if the regulator rejects its application for a spot Bitcoin (BTC) exchange-traded fund (ETF) on July 6. .
Since the company submitted its filing to the regulator on October 19, 2021, it has been pending the SEC’s decision to convert the $19.8 billion Grayscale Bitcoin Trust (GBTC) into a spot-based ETF.
The SEC has delayed its decision multiple times, once in December and once again in February. The final decision on the application is expected on 6 July.
Jake Chervinsky, head of policy at crypto advocacy group Blockchain Association, said adding such firepower to Grayscale’s legal team is a “strong move” and will have little chance of “breaking out of a legal challenge” if the SEC decides to withdraw approval. now.
Strong move. @grayscale means business.
The deadline for the SEC to approve or reject an application to convert GBTC to ETF is July 6th. Undoubtedly, it should be approved. I don’t understand how the SEC escaped a legal challenge, especially one led by Don Verrilli.
Mark your calendar. https://t.co/ZbZ7oTXhHR
— Jake Chervinsky (@jchervinsky) 7 June 2022
In March, Grayscale CEO Michael Sonnenshein told Bloomberg that if his Bitcoin Spot ETF application was rejected by the financial regulator, his firm would consider a lawsuit under the Administrative Procedure Act (APA).
He became a vocal critic of the regulator, which approved crypto futures ETF products in October 2021 but has yet to do so for the spot ETF equivalent.
The newly hired Donald B. Verrilli Jr. is a former US Attorney General who served in Barack Obama’s administration from 2011 to 2016. He is currently a partner at the California law firm Munger, Tolles & Olson and established the Washington DC Office in 2016.
Grayscale explained on Twitter that the attorney was involved in more than 50 cases before the US Supreme Court, many of which were directly related to Administrative Procedure Act (APA) violations.
He will serve as a senior legal strategist, working with his attorneys at Davis Polk & Wardwell LLP and his internal counsel, including Craig Salm, who serves as chief legal officer.
Don’s legal acumen is unmatched. There is no better advocate we can be forced to join our legal strategy team. @DavisPolkReg while continuing to advocate conversion $GBTC to a point #Bitcoin ETF. https://t.co/ZruXc1aiQ6
— Craig Salm (@CraigSalm) 7 June 2022
Grayscale described Verrilli as one of the country’s most experienced lawyers, “who has a deep understanding of legal theory, administrative procedure, and the practical issues of working with the judicial branch.”
“We’re excited that he’s joining our team as we work towards a positive solution for investors and the general public.”
Entering the last month before we get a response to our conversion app $GBTC We have hired former US Attorney General Donald B. Verrilli, Jr., as additional legal counsel to an ETF. Brief information about the reason:
— Grayscale (@Grayscale) 7 June 2022
Meanwhile, Citadel Securities, a market maker that could provide liquidity for crypto ETFs like the ones proposed by Grayscale on Tuesday, said it is open to supporting crypto ETFs but will not do so without regulatory approval.
“We will be ready when these products are approved and approved, but we are taking a measured approach,” Citadel ETF chairman Kelly Brennan said in an interview with Bloomberg.
Market makers are key liquidity providers in the ETF ecosystem as they provide continuous and efficient ETF trading.
Related: Why the world needs a Bitcoin ETF in the US: 21Shares CEO explains
Elsewhere in the world, crypto-linked ETFs are gaining increasing popularity, with total assets invested in crypto ETFs and exchange-traded products (ETP) elsewhere in the world, according to data from ETF research firm ETFGI. According to the report, it will reach 16.28 billion dollars globally by the last quarter of 2022.
In February 2021, Canada launched the first Bitcoin ETF, the Purpose Bitcoin ETF, making it one of the first countries in the world to adopt a spot Bitcoin ETF.
On May 12, Australia launched its first spot crypto ETFs, including a Bitcoin ETF from Cosmos Asset Management and BTC and Ether (ETH) spot ETFs from 21Shares. Two more crypto-backed ETFs were launched on Monday, June 6th.
In May, Grayscale began trading the first European ETF, the Grayscale Future of Finance UCITS ETF, which is quoted on the London Stock Exchange, Borsa Italiana and Deutsche Börse’s electronic trading platform Xetra.