By Benjamin Pimentel and Ryan Deffenbaugh. July 12, 2022. (Protocol)
When the SEC shot down Grayscale’s pitch for a bitcoin spot ETF, the crypto investment firm could have given it another try by filing a new proposal. But Grayscale was bent on going to court, the company signaled. And it’s not the only company to adopt an aggressive legal posture against a regulator.
Litigation has emerged as an important tool for crypto as it wrestles with unclear rules and a slow legislative path to clarity. Grayscale’s legal offensive and other disputes bubbling up shows how important the courts have become for settling disputes with regulators like SEC. In many cases, outcomes of court battles could have far-reaching consequences for the industry — especially if crypto companies win.
Grayscale CEO Michael Sonnenshein had talked about his company’s plans to lawyer up weeks before the SEC’s decision. He said the company hired prominent Washington attorney Donald Verrilli to prepare for a legal battle. Chief Legal Officer Craig Salm said “the court is the natural next step for us to take.”