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Grayscale Investments has hired a former U.S. Solicitor General in preparation for a potential legal spat with the U.S. Securities and Exchange Commission (SEC), should the regulator reject its application for a spot Bitcoin (BTC<\/a>) exchange-traded fund (ETF)<\/a> on July 6.<\/p>\n The company has been waiting on a decision from the SEC to convert its flagship $19.8 billion Grayscale Bitcoin Trust (GBTC) into a spot-based ETF, since filing its application to the regulator on October 19, 2021. <\/p>\n The SEC has pushed back its decision on multiple occasions, once in December<\/a> and again in February<\/a>. A final decision on the application is expected on July 6. <\/p>\n Jake Chervinsky, head of policy at the crypto advocacy group Blockchain Association said adding such firepower to Grayscale\u2019s legal team was a \u201cstrong move\u201d, and that the SEC would have little chance of “surviving a legal challenge” if it decided to knock back approval now. <\/p>\n Strong move. @Grayscale<\/a> means business.<\/p>\n The SEC’s deadline to approve or deny the application to convert GBTC to an ETF is July 6. No doubt, it should be approved. I don’t see how the SEC survives a legal challenge if not, especially one led by Don Verrilli.<\/p>\n Mark your calendar. https:\/\/t.co\/ZbZ7oTXhHR<\/a><\/p>\n \u2014 Jake Chervinsky (@jchervinsky) June 7, 2022<\/a><\/p><\/blockquote>\n In March, Grayscale CEO Michael Sonnenshein<\/a> told Bloomberg that his firm would consider a lawsuit under the Administrative Procedure Act (APA)<\/a> should the application for its Bitcoin Spot ETF be denied by the financial regulator.<\/p>\n He has been a vocal critic of the regulator, which approved crypto futures ETF products in October 2021 but is yet to do so for a spot ETF equivalent. <\/p>\n Donald B. Verrilli Jr., the new hire, is a former U.S. Solicitor General who served from 2011 to 2016 under Barack Obama\u2019s administration. He is currently a partner in Californian law firm Munger, Tolles & Olson, and founded its Washington D.C. Office in 2016. <\/p>\n On Twitter, Grayscale explained that the lawyer has been involved in more than 50 cases before the U.S. Supreme Court, including several that dealt directly with Administrative Procedure Act (APA) violations.<\/p>\n He will serve as a senior legal strategist, working alongside its attorneys at Davis Polk & Wardwell LLP and its in-house counsel, including Craig Salm, who serves as chief legal officer. <\/p>\n Don\u2019s legal acumen is unmatched. There\u2019s no better advocate we could have to join our legal strategy team with @DavisPolkReg<\/a> as we continue advocating to convert $GBTC<\/a> to a spot #Bitcoin<\/a> ETF. https:\/\/t.co\/ZruXc1aiQ6<\/a><\/p>\n \u2014 Craig Salm (@CraigSalm) June 7, 2022<\/a><\/p><\/blockquote>\n Grayscale described Verrilli as one of the nation\u2019s most experienced attorneys with \u201ca deep understanding of legal theory, administrative procedure, and the practical matters of working with the judiciary branch.\u201d<\/p>\n \u201cWe are thrilled that he is joining our team as we work towards a positive resolution for investors and the general public.\u201d<\/p>\n As we enter the final month before a response is due on our application to convert $GBTC<\/a> to an ETF, we have retained Donald B. Verrilli, Jr., former Solicitor General of the United States, as additional legal counsel. A short on why:<\/p>\n \u2014 Grayscale (@Grayscale) June 7, 2022<\/a><\/p><\/blockquote>\n Meanwhile Citadel Securities, a market maker that could provide liquidity for crypto ETFs such as that proposed by Grayscale on Tuesday said it was open to supporting crypto ETFs but won\u2019t do so without regulators’ approval. <\/p>\n \u201cWe will be ready if and when those products are approved, but we are taking a measured approach,\u201d said Citadel ETF head Kelly Brennan said in an interview<\/a> with Bloomberg. <\/p>\n Market makers are key liquidity providers in the ETF ecosystem as they ensure continuous and efficient ETF trading. <\/p>\n Related: <\/em><\/strong>Why the world needs a spot Bitcoin ETF in the US: 21Shares CEO explains<\/em><\/strong><\/a><\/p>\n Elsewhere in the world, crypto-linked ETFs have been gaining increasing popularity, with total assets invested in crypto ETFs and exchange-traded products (ETP) globally reaching $16.28 billion by the end of Q1 2022, according to data<\/a> from ETF research firm ETFGI.<\/p>\n In February 2021, Canada debuted its first-ever Bitcoin ETF<\/a>, the Purpose Bitcoin ETF, becoming one of the first countries in the world to adopt a spot Bitcoin ETF.<\/p>\n On May 12, Australia launched its first spot crypto ETFs, including a Bitcoin ETF from Cosmos Asset Management, plus BTC and Ether (ETH<\/a>) spot ETFs from 21Shares. Another two crypto-backed ETFs were launched on Monday, June 6. <\/p>\n In May, Grayscale began trading its first European ETF, called Grayscale Future of Finance UCITS ETF, which has listings on the London Stock Exchange, Borsa Italiana as well as Deutsche B\u00f6rse\u2019s electronic trading platform Xetra.<\/p>\n<\/div>\n\n
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