According to a court order filed on Monday, the District of Columbia Court of Appeals will commence the hearing of oral arguments on Grayscale Investment’s appeal against the SEC’s denial of converting Grayscale Bitcoin Trust into an ETF.
However, both sides will argue their cases in the District of Columbia Court of Appeals on March 7, per the court order filed on January 23.
Craig Salm, the chief legal officer of Grayscale, stated in a tweet on January 24 that the newly filed motion was “good news” because they had previously anticipated that oral arguments would be set “as soon as Q2.”
— Grayscale (@Grayscale) January 24, 2023
On February 6, 30 days before the argument date, the court will make the panel for Grayscale’s case argument public. In addition, it will also determine the length of the argument in the subsequent part.
Grayscale Submitted Its Counter-Brief To SEC
Grayscale claimed in a reply brief submitted earlier this month to the D.C. Court of Appeals that the SEC had behaved arbitrarily in treating spot-traded ETFs differently from futures-traded products and that it had overstepped its bounds by rejecting Grayscale’s request for a Bitcoin ETF.
Michael Sonnenshein, CEO of Grayscale, highlighted a related idea on CNBC on January 24. He said:
It’s important to remind the role that regulators like the SEC play when it comes to investors. They’re not here to tell investors what to or what not to invest in. They’re here to ensure all the proper disclosures are made […] so [investors] are aware of all the risks associated.
Regarding their legal action against the SEC, Sonnenshein stated that they were “definitely anticipating” a ruling from the courts in “Q2 or Q3 of this year.”
The frustrating thing for investors and certainly the Grayscale team is that we’re actually a business that was born in the U.S., made use of existing U.S. regulatory frameworks to bring crypto to investors in a safe and compliant way.
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Many investors are cautious in the crypto market due to difficult economic conditions and the failures of firms like Terra, Three Arrows Capital, Celsius, Voyager, and FTX. Adding to the concerns, Genesis, Grayscale’s sister company, filed for bankruptcy on Thursday.
Furthermore, the SEC denied Grayscale’s request to transform GBTC into an ETF last June. In response, Grayscale filed a legal complaint against the SEC, stating that the agency’s reasoning for denying the application was “defective” and “inconsistent.