- Grayscale has hired former Solicitor General Donald B. Verrilli to assist in its push for a Bitcoin ETF
- Grayscale has been working on converting its GBTC Trust to a Bitcoin ETF for eight months
- The SEC has rejected every Bitcoin ETF application to date, but some on the inside feel that Grayscale can be the first
It’s the fading dream that just won’t die, and Grayscale is going all out to try and be the one who realises it against all odds – the company has hired the Solicitor General under the Obama administration to try and push its case with the Securities and Exchange Commission (SEC) over a Bitcoin ETF. Grayscale has been on the path of converting its Bitcoin Trust into the first Bitcoin ETF for over a year, and in getting Donald B. Verrilli on board it thinks it can finally be the one to crack the code. The SEC, however, may have other ideas.
SEC Wants “Comprehensive Surveillance-sharing Agreement” With Exchanges
Exchange Grayscale confirmed its plans to convert the GBTC Trust into a Bitcoin ETF last April following months of rumours it was planning such a move, and in the intervening years it has seen a pattern that started in March 2017 continue to today – every Bitcoin ETF application has been rejected by the SEC.
The SEC has given many reasons for Bitcoin ETF rejections in the past ranging from the potential for market manipulation and other investor protections. Most recently, Sal Gilbertie, CEO of Teucrium, told CNBC’s ETF Edge that a recent letter from the SEC to his company had revealed that the major bone of contention from the regulator with regard to awarding a Bitcoin ETF was that of the exchange being used for the ETF – if the exchange agreed to “comprehensive surveillance-sharing agreement” the SEC’s concerns over manipulation could be “overcome”.
Insiders Think Grayscale Has Best Chance of Success
Grayscale posted a tweet thread yesterday which outlined its current position and the rationale behind Verrilli joining the board, calling him “one of the nation’s most experienced attorneys with a deep understanding of legal theory, administrative procedure, and the practical matters of working with the judiciary branch.”
The Grayscale Bitcoin ETF would trade on the New York Stock Exchange, so much rests on the ability of Verrilli and the Grayscale team to convince the SEC that they alone, to date, have the ability to avoid manipulation in the markets. Verrilli’s appointment has gone down well with those in the know, including prominent crypto lawyer Jake Chervinsky, who believes that Grayscale’s application is the strongest so far:
Strong move. @Grayscale means business.
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.
Mark your calendar. https://t.co/ZbZ7oTXhHR
— Jake Chervinsky (@jchervinsky) June 7, 2022
Call us sceptical, but we’ll believe it when we see it.