Grayscale’s legal challenge to SEC sparks response from the community

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After Grayscale’s request to convert the Grayscale Bitcoin Trust (GBTC) into a Bitcoin (BTC) exchange-traded fund (ETF) was denied, the company launched a legal challenge against the US Securities and Exchange Commission. After these events, the community responded with various reactions, from accusing the Securities and Exchange Commission of price gouging to proposing various solutions.

Redditor u/ThatsMRcurmudgeon2u, who presented himself as a securities attorney, had a say in the matter. According to the Redditor, many anticipated the lawsuit, with SEC President Gary Gensler making it clear that he wanted the exchanges to register with the SEC. The redditor also accused the Securities and Exchange Commission of “holding GBTC hostage.”

Attorney Jake Chervinsky tweeted that the ETF’s denial was “deeply disappointing” and defying federal law and common sense. He noted that the SEC’s role should be to protect investors and argued that the ETF was a better product for them.

According to Twitter user Ann, since the SEC has approved an ETF that lowers the price of Bitcoin, it may act to “suppress the price of Bitcoin.” Ann argued that this is not the role of the Securities and Exchange Commission.

On the other hand, Bitcoin proponent and author Vijay Boyapati suggested a different path. Boyapati said a better move would be to “end the fund” and return Bitcoin to investors. The author criticized Grayscale’s 2% fee and urged the company to “do the right thing.”

Redditor u/Percyheckendorf has argued that the SEC’s move to reject the ETF is bad for retirees, as pension funds will be “stuck buying stocks,” which don’t have as much potential as Bitcoin.

Related: The Elusive Bitcoin ETF: Hester Peirce Criticizes the Lack of Legal Clarity on Cryptocurrency

In a letter to investors on Monday, Grayscale announced that the US Securities and Exchange Commission (SEC) has received 11,400 letters related to the proposed Bitcoin ETF. According to the company, 99% of the messages were in support of the ETF. Despite these letters of support, they were not approved.

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