Home Crypto

US Chamber of Commerce Supports Grayscale Investments’ suing SEC.

US Chamber of Commerce Supports Grayscale Investments’ suing SEC.

The US Chamber of Commerce is backing Grayscale Investments’ lawsuit against the Securities and Exchange Commission (SEC). The lobbying group claims the SEC unfairly disapproved the proposed conversion of GBTC (bitcoin trust) to an ETF. It said SEC’s decision to deny Grayscale’s planned fund reflects a paternalistic belief that the agency knows better than investors.

In an amicus brief, the US Chamber of Commerce lawyers said the approach enabled the commission to pick winners and losers without having to account for its reasoning to the interested public or to the courts. It believes the SEC deprived investors of the freedom to make their own investment choices and businesses of the certainty they need to innovate and meet investor demand.

When the SEC had rejected the application to morph its flagship product into an ETF, Grayscale Investments asked the US Court of Appeals for the District of Columbia Circuit to review the decision. Besides the US Chamber of Commerce, amicus briefs have also been filed by the Blockchain Association and Coinbase. The lobbying group claims that SEC is making an arbitrary and capricious action as defined by the Administrative Procedure Act (APA). It highlights the agency’s approval of ETFs holding Bitcoin futures contracts, which Grayscale says is subject to identical risk of fraud and manipulation as the spot price of Bitcoin.

Dave Nadig, a financial futurist at VettaFi, believes the case is tough. He said SEC’s Congress-approved mandate gives the watchdog extremely clear authority to regulate rule-making about the activities of securities exchanges. But the US Chamber of Commerce pointed out that the APA gives administrative agencies leeway when making policy judgments entrusted to them by Congress. The APA does not give SEC authority to make decisions that affect large sectors of the economy through orders that ignore statutory mandates.



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.