SEC has rejected yet another physical replication ETF on Bitcoin, Grayscale says it is ready to take the court route, to take its own arguments before the judge.

This would be a first for the agency that regulates markets in the US, at least in the crypto field, since the body is always or almost always on the side of the prosecution, something that occurred with Ripple in the legal dispute that will most likely see it lose.

This is why Grayscale Investments LLC has hired former Obama administration Attorney General Donald Verrilli, 64, to strengthen its eventual case against the SEC. He has successfully argued two landmark cases for the US government and is undoubtedly a first-rate profile to try to turn the trust into a physical replication ETF.

Grayscale’s CEO Michael Sonnenshein takes it a step further, predicting yet another rejection by the SEC in its expected decision on 6 July, and declares that ‘all options are on the table’, while even more assertive is the fund manager’s chief legal officer Craig Salm, who told Bloomberg:

“We are prepared for any outcome and if one of the options is to file a lawsuit against the SEC, what better person than someone who has represented the US government as a legal strategy?”

Among the arguments in support of their case, Grayscale’s lawyers point to the Administrative Procedures Act, which essentially holds that the SEC cannot favour one situation and reject another if both situations are similar. It could not treat bitcoin futures ETFs and bitcoin spot ETFs differently.

By contrast, Gary Gensler, the current head of the SEC has always justified the agency’s modus operandi on the grounds that it would not consider these instruments sufficiently safe until there are institutional custodianships on a par with those we have for gold.

The point of contention is really important because the eventual approval of a physically replicating ETF would bring cryptocurrencies closer to both retail investors and even large groups who want direct exposure to Bitcoin without the complications of custody.

The 6 July decision has other large groups such as Fidelity and Van Eck, which have already been denied approval by the SEC in the recent past and are ready to make their case.