Grayscale Files Lawsuit Against SEC for Not Converting its GBTC into an ETF

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Crypto-focused investment firm Grayscale Investments has just filed a lawsuit against the US Securities and Exchange Commission (SEC) after the regulator rejected the company’s requests to convert its GBTC trust to a Bitcoin ETF.

According to the regulator, it has made this decision due to the fact that the investment product does not meet the requirements for “preventing fraudulent and manipulative actions as well as protecting investors and the public interest.”

The SEC had previously said it was ready to approve Bitcoin-ETFs based on futures and that it would reject the applications of ETFs based on its spot variant because they may violate the Administrative Procedure Act.

The company has said that if the SEC does not see market manipulation in the futures market, it can be concluded the spot market also satisfies this criterion to a sufficient extent.

Grayscale has said in a press release:

“We are deeply disappointed and strongly disagree with the SEC’s decision to continue to ban spot Bitcoin ETFs from entering the US market.”