Grayscale Investments LLC acquires a new secret weapon in the form of former Solicitor-General Donald Verrilli, who served in the Obama administration from 2011 to 2016.
Grayscale Investments LLC has brought on board a top legal expert, Donald Verilli, as the company weighs the potential rejection of its application to the Securities and Exchange Commission to convert its Grayscale Bitcoin Trust into a physically-backed bitcoin ETF.
Grayscale CEO Michael Sonnenshine has clarified that “all options are on the table” should the SEC reject his application, before threatening to sue the agency if its application was rejected. The SEC’s decision is expected on July 6, 2022.
Grayscale chief Craig Salm said, “In the name of being prepared for all possible consequences, if one option is potentially bringing a lawsuit against the SEC, a better person than someone representing the US government as a legal strategist.” What else could happen?” The legal officer told Bloomberg.
Grayscale brings in the big guns
In hiring Verrilli, the world’s largest digital asset manager, Grayscale joins several crypto companies camping out at the revolving door of Washington. In April 2022, Astra Protocol appointed former head of the Department of Homeland Security Kirstjen Nielsen as a strategic advisor to help understand the risk landscape in decentralized finance. Mick Mulvaney, Trump’s former special envoy to Northern Ireland, previously joined Astra Protocol to help advance the craft of piracy in Web3. Former Treasury Secretary Larry Summers already serves as an advisor to the holding company behind the digital currency conglomerate, Grayscale.
Verrilli is working with Grayscale’s legal team and outside attorneys, Davis Polk & Wardwell, to prepare for a potential face-off with the SEC in court. Their preparation includes legal arguments surrounding the Administrative Procedure Act, which essentially argues that the SEC cannot support one position and reject the other if both positions are equal. Simply put, it cannot treat the Bitcoin Futures ETF and the Bitcoin Spot ETF differently. Grayscale argues that approving bitcoin futures ETFs because such a product meets the criteria of the Investment Companies Act of 1940 and rejects spot bitcoin ETFs because it fails to qualify under the Securities Exchange Act of 1934 that the APA requires. violates.
So it hopes to draw on Verilli’s “strong background experience” in APA cases to bolster its argument.
Serving under the Obama administration, Verilli successfully fought for the government in Supreme Court cases regarding equality of same-sex marriage and the Patient Protection and Affordable Care Act. He argued 37 cases before the Supreme Court during his tenure as Solicitor General, which is one level below the office of Attorney General.
Verilli’s hire reinforces Grayscale’s pledge that whatever it does to turn its bitcoin trust into an ETF could potentially unlock $8 billion for investors.