James Atkins
Editor
Editor
Grayscale filed a lawsuit against the United States Securities and Exchange Commission (SEC), and the company’s CEO said the move means so much more than Bitcoin.The CEO of Grayscale, Michael Sonnenshein, says that their lawsuit against the SEC has nothing to do with Bitcoin.
Last year, Grayscale announced that it planned to file for a Bitcoin exchange-traded fund (ETF) with the SEC. However, as has been the case with other spots of Bitcoin ETFs submitted by other investment firms, the SEC rejected the application.
Consequently, after the regulatory agency denied Grayscale’s application, Grayscale filed a lawsuit against the SEC this past July.
CEO of Grayscale Michael Sonnenshein states in an interview with Yahoo Finance’s All Markets Summit. That the lawsuit is about more than just launching a bitcoin ETF. he says;
“This lawsuit isn’t really about bitcoin. It’s about presenting strong, sound legal arguments that will protect investors and ensure that the SEC is carrying out its responsibilities.”
The SEC has repeatedly rejected applications for Bitcoin ETFs in the past, citing the cryptocurrency’s susceptibility to market manipulation.
Grayscale now petitions the federal appeals court in Washington, D.C., to take a second look at the SEC’s decision about ETFs. He thinks the SEC is being too strict with its standards and that they are not applying the same standards; to futures Emission Trading Systems (ETS).
The Grayscale CEO adds that;
“This is the first time we’ve ever seen them act this way for any other product or commodity. They’re usually much more lenient with bitcoin futures ETFs, but they’re being very strict with GBTC [Grayscale Bitcoin Trust]. So, the SEC is acting outside of its authority under the [Securities and] Exchange Act. And that’s one of our strongest arguments.”
Sonnenshein notes that cryptocurrency companies are being forced to relocate to other countries. Due to the lack of adequate regulation in the United States. He concludes that;
“Members of both parties in Congress are passing bills that show support. Companies are moving outside the US because our regulatory landscape can’t keep up with how fast innovation is happening here.”
Although there is no Bitcoin ETF accessible in the United States, other cryptocurrency-related ETFs are already obtainable for investors.
This past month, BlackRock debuted a blockchain ETF for European clients known as the iShares Blockchain Technology UCITS ETF (BLKC).
Grayscale Investments is a digital currency asset management firm founded in 2013. The firm offers investment vehicles for 10 different cryptocurrencies, including Bitcoin and Ethereum.
Michael Sonnenshein, Grayscale’s CEO, has been vocal about the need for clear regulation in the cryptocurrency space.
In September 2020, Grayscale faced a lawsuit from the SEC alleging that. Grayscale had not properly registered one of its funds as an investment company.
Grayscale argued that their fund was exempt from registration because it was only available to accredited investors, but the SEC disagreed.
Judgment for the case was filed on October 20th, 2022, with Grayscale’s CEO Michael Sonnenshein releasing a statement clarifying that.
The lawsuit is not about Bitcoin or other cryptocurrencies, but rather Grayscale’s compliance with investment company registration requirements.
In his statement, Sonnenshein emphasized Grayscale’s commitment to compliance and regulatory practices, saying that they have “always operated Grayscale by the letter and spirit of all applicable laws and regulations.”
The outcome of this case could have significant implications for Grayscale’s operations and the larger cryptocurrency industry.
However, as Sonnenshein notes, it is important to remember that the case is about Grayscale’s compliance with the law. And not about the nature or legitimacy of cryptocurrencies.
Sonnenshein also addresses the impact of the case on Grayscale’s customers, assuring that all current Grayscale products. “Remain available for accredited investors to invest in, and Grayscale will continue to offer new products for investment.”
Do you think Micheal Sonnenshein can pull this case through? Please hit the comment section and tell us what you think!
I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.
