Crypto: Grayscale does not admit defeat against the SEC

Of all the fights conducted by the SEC against American exchanges, there has never been a standing knockout. We have all known a Ripple who has never admitted defeat by the American regulator. For its part, Grayscale shows great endurance despite its misadventures with this institution. Lately, the digital asset manager has shown that he is not ready to give up the game despite the team’s series of uppercuts to Gary Gensler.

Grayscale goes to the rescue of Stellar (XLM), Zcash (ZEC) and Horizen (ZEN)

More and more players in the crypto universe are currently looking at the measures that the SEC will take as part of its aggressive policy towards exchanges. Didn’t we learn at the beginning of this month of August that she is going to lead a kind of “witch hunt” to clean up this world with a flourishing future?

When it comes to Grayscale, it’s time to dodge and counterattack. Reality check: The US regulator recently questioned the digital currency asset manager about the “ securities law analysis of three less popular tokens. This survey specifically concerns the viability of XLM, ZEC and ZEN. The latter being considered cryptocurrency trusts suitable for brokerage accounts.

Differences between Grayscale’s ZEC filing in May (left) and June (right), where the SEC question line is seen.

In response, Grayscale Investment LLC leaked the actual investigation to the internet. Then the company admitted to responding to members of the SEC’s Division of Corporate Finance in the same document. And lastly, she acknowledged that ZEC, XLM and ZEN “ can currently constitute a security, based on the facts as they exist today “.

Basically, Grayscale intends to remove the thorn from its feet by declaring that these three relatively minor trusts have the same legal status as other securities. So any idea of ​​considering them as titles will be discarded for good.

The SEC never had the last word

We are aware that Grayscale already has a history with the Securities and Exchange Commission the United States. One of the major twists in their exchange of blows made the headlines last June. At that time, the digital asset manager wiped a refusal for his project to transform his GBTC fund, the Bitcoin Trust, into an ETF.

The reason for this rejection? Gary Gensler, the current president of the agency, saw no digital assets worthy of the status of ” raw materials other than bitcoin. It was difficult for him to come up with new regulations for a cash bitcoin ETF. Additionally, Grayscale had shown no willingness to address the agency’s concerns about market manipulation at the time. So it will be difficult for him to protect investors in this case.

Several crypto investors seemed sickened by this decision. The Grayscale barons subsequently chose the court route by filing a motion challenging that SEC decision.

[La SEC] does not apply consistent treatment to similar investment vehicles, and acts arbitrarily and capriciously in violation of the Administrative Procedure Act and the Securities Exchange Act of 1934 “, hammered Donald B. Verrilli Jr, the chief legal strategist of Grayscale, on the occasion.

Moreover, if there are other companies accustomed to lawsuits against the Securities and Exchange Commission, Ripple is one of them. Admittedly, their duel did indeed begin several years ago, but for the moment, the two do not seem to want to give themselves a break. The way things are going, it’s safe to say the two drew.


The SEC may show its claws against cryptocurrency exchanges, but it must also know that on the opposing side, there is no shortage of suitable replicas. Here, the need for an open confrontation against crypto companies can be questioned. Is this the only way that leads to the regulation of the sector?

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