In preparation, Grayscale had already assembled star legal firepower.

Grayscale Investments, the largest digital asset manager globally, has filed a suit against the SEC for rejecting its application to convert the Grayscale Bitcoin Trust into a spot bitcoin ETF. Donald B Verrilli Jr., former U.S. Solicitor General, and a top lawyer for the Obama administration, whom Grayscale hired early this month, filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit.(Coin Telegraph)

The SEC rejected Grayscale’s application “to protect investors and the public interest.”

Verrilli said:

“The SEC is failing to apply consistent treatment to similar investment vehicles, and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934.”

“There is a compelling, common-sense argument here, and we look forward to resolving this matter productively and expeditiously.”

Sonnenshein said:

Michael Sonnenshein, Grayscale’s CEO, said: “We are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market.”

“We believe American investors overwhelmingly voiced a desire to see GBTC convert to a spot bitcoin ETF, which would unlock billions of dollars of investor capital while bringing the world’s largest bitcoin fund further into the U.S. regulatory perimeter.”

“We will continue to leverage the full resources of the firm to advocate for our investors and the equitable regulatory treatment of Bitcoin investment vehicles.”

Sonnenshein had made it clear as far back as March that in the event of an SEC rejection, Grayscale would seek legal recourse under the the Administrative Procedure Act.

However, a court decision on the dispute is only likely to emerge by Q3 2023 to Q1 2024, according to James Seyffart, an ETF analyst at Bloomberg Intelligence.

Related Story: As SEC’s Spot ETF Decision Looms, Grayscale Brings On The Heavy Legal Artillery