Grayscale’s Bitcoin ETF Battle With SEC Gets Backing From Crypto Titan Coinbase

by Arthur · October 20, 2022

Crypto exchange giant Coinbase is supporting Grayscale in its legal battle against the US Securities and Exchange Commission (SEC).

Crypto asset manager Grayscale is suing the SEC in response to the agency’s rejection of its spot market Bitcoin (BTC) exchange-traded fund (ETF).

A brief filed with the U.S. Court of Appeals for the District of Columbia Circuit on Oct. 18 alleges that the SEC’s decision “unfairly limits investor choice.”

“In doing so, the Commission has abandoned its investor protection mandate, and it has abused its discretion by engaging in the arbitrary and capricious practice of picking winners and losers among investment products.”

The brief was filed with the Blockchain Association, Chamber of Digital Commerce, Chamber of Progress and Coin Center, which support Grayscale’s claims.

The non-profit organizations participate in the lawsuit as amici curiae – parties who are neither the plaintiff nor the defendant, but intervene in the case to present their point of view.

“This case implicates critical regulatory and policy issues that may have far-reaching implications for the digital assets and blockchain ecosystem. Amici curiae therefore have particular interests in highlighting areas where there is a significant need for greater regulatory clarity or consistency.”

The filing says other amici are also set to file their briefs in support of Grayscale, including Coinbase.

Counsel understands that the following members also intend to file briefs in support of the petitioner: Coinbase Global, Inc. (“Coinbase”), the New York Stock Exchange (“NYSE”), the US Chamber of Commerce and certain former regulators and academics. “

Coinbase positions itself as Grayscale’s ally in the suit as it takes an aggressive stance on crypto-related issues. Last month, the exchange’s CEO, Brian Armstrong, said that it is critical for the United States to adopt crypto regulations that strengthen domestic innovation.