Grayscale, the world’s largest digital asset manager, will present its arguments against the Securities and Exchange Commission in the Court of Justice over the US regulator’s rejection of the Spot Bitcoin ETF on March 7.
Grayscale has already shown its intentions to introduce an exchange-traded fund (ETF) that tracks bitcoin’s performance in the US several times, but without success so far. The SEC refused to launch the product in June last year and upheld its decision a few months later.
Craig Salem, Grayscale’s chief legal officer, stated in 2021 that the SEC may have a “clear view” on ETFs, but it should have a “reasonable forbearance” on the matter. CEO Michael Sonnenstein went further, vowing to sue the regulator for rejecting the company’s initiative.
According to recent information, the Court of Appeals for the District of Columbia has ordered the two parties to meet in court on March 7 to present their views. Grayscale expected the legal battle to begin only in the second quarter of 2023.
The digital asset manager began pursuing his goal after the Securities and Exchange Commission (SEC) approved a ProShares-backed ETF (dubbed BITO) in October 2021.
Numerous crashes in the cryptocurrency industry over the past year have negatively affected Grayscale. Unlike some exchanges that provided proof of reserves after the FTX incident, it refused to do so, citing security reasons. The company also stated that its escrow partner, Coinbase, performs regular on-chain verification.
Concerns have arisen that Grayscale may run into additional problems because it is under the protection of the struggling Digital Currency Group (DCG). Genesis, one of its subsidiaries, has already filed for bankruptcy protection.
In contrast to its struggles with the US regulator, Grayscale introduced a cryptocurrency ETF to the European market last summer. The product, which tracks the “Bloomberg Grayscale Futures of Finance Index,” is made up of a range of companies that are part of the sector, including exchanges, miners, brokerages, asset managers and technology companies.