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Court Prepones the Hearing Dates in Grayscale vs. SEC Oral Arguments

As reported by CNBC, the court has set March 7 as the date for both parties to give their oral arguments. This will expedite a process Grayscale had anticipated would not happen until sometime during the second quarter.

Photo by Anna Sullivan / Unsplash

Grayscale is now up to its neck in the litigation, and many people in public have assumptions about the possible obstacles that the lawsuit may provide.

The Columbia Court of Appeals has moved up the dates for conducting the oral hearing in the continuing litigation between Grayscale Investments and the US SEC.

The Court has set (1) the date of March 7 as the date for both parties to give their oral arguments, as reported by CNBC. This will expedite a process Grayscale had anticipated would not happen until sometime during the second quarter.

Due to its extensive exposure to the recently defunct FTX Derivatives Exchange, Grayscale is one of the most notable subsidiaries of the Digital Currency Group (DCG), the crypto currency empire owned by Barry Silbert and which is currently experiencing a strain on its liquidity.

Grayscale submitted a suit against the SEC in June of 2018 when the agency regulating financial markets turned down the company's request to transform its flagship Grayscale Bitcoin Trust (GBTC) into a full-fledged Bitcoin exchange-traded fund (ETF).

Grayscale did not present persuasive proof that it could avoid the core price manipulation unique to the ecosystem of digital currencies, which was the assumption upon which the SEC based its decision to deny Grayscale's application.

Grayscale Investments believes that the SEC lacks the ethical justification to reject the Bitcoin Futures ETF application now that it has approved the application of other companies like ProShares.

After receiving a denial from the commission and adding Donald B. Verrilli to its legal team, the company filed the complaint in a matter of days, and it was completed in less than a week.

Verrilli is well-known for his high-profile victories when he served as a Chief Solicitor under the administration of former President Barack Obama.

The business said it was optimistic about its chances of success in the trials after receiving Verrilli's feedback.

The request made by Grayscale is not overly ambitious; it just entails asking the Court to investigate the SEC's choices and establish whether those determinations align with the commission's past decisions.

Grayscale Ecosystem is Still a Major Player

Grayscale is now up to its neck in the litigation, and many people in public have assumptions about the possible obstacles that the lawsuit may provide.

The business responded to several frequently asked questions during the previous year. Still, its pledge to reimburse investors' money if it was found guilty by the SEC stands out in particular.

Even if the crypto winter has caused a considerable value drop, the Grayscale Bitcoin Trust still has a total of $14.5 billion in managed assets as of January. Despite this, the product is still regarded as one of the most significant in the crypto currency ecosystem.

The litigation is currently operating at full speed, and there is a possibility that the accelerated argument hearing, which the Court of Appeals will rule, may signal that the court system wants a quick conclusion to the issue.

As things stand, investors may be in a better position to gain financially should the litigation be resolved before the conclusion of the bankruptcy procedures involving Genesis Global, another subsidiary of DCG.

The presumption is that the insolvency may have an underpinning that would stimulate Grayscale to dispose of the more than 600,000 Bitcoin holdings it has in custody, which is a situation that will affect investors much more significantly.

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