Bitwise Not Ruling Out Suing the SEC, Exec Says

Chief Compliance Officer Katherine Dowling told CoinDesk TV that litigation is not off the table after the regulator denied its spot bitcoin ETF application

article-image

Matt Hougan, CIO of Bitwise, at Permissionless 2022 | Source: Ben Solomon

share

key takeaways

  • Bitwise CIO previously told Blockworks the firm would first seek a “reasonable research pathway” to address SEC concerns
  • Grayscale’s head of legal said a decision on its lawsuit could take two years

As Grayscale moves forward with a lawsuit against the SEC for denying its spot bitcoin ETF application, Bitwise Asset Management has not ruled out doing the same. 

Bitwise Chief Compliance Officer Katherine Dowling said in a Tuesday interview on CoinDesk TV that such litigation would be about “answering technical questions,” noting that she “would not put it off the table.”

“I think it’s more productive if you can engage in a dialogue, figure out what the obstacles are and answer those questions together in a productive manner,” she said. “But that isn’t always the approach that is going to work.”

A Bitwise spokesperson declined to comment.

The Bitwise filing rejected by the SEC last month was the firm’s second attempt to launch a spot bitcoin ETF. The San Francisco-based company had filed for one in 2019, but withdrew its request in January 2020 amid regulatory concerns. Bitwise refiled last October, including roughly 150 pages of research within the application focused on price discovery in the crypto markets. 

A week before the decision, Bitwise Chief Investment Officer Matt Hougan told Blockworks that despite Grayscale’s plans to sue the SEC, Bitwise would likely stick with its research-centric approach.

“The SEC is clearly engaged in this space and they’re asking good questions,” Hougan said at the time. “In the case they disapprove our application, we’ll have to see what the content of that disapproval is and whether there’s a reasonable research pathway to answer it or not.”

Grayscale filed a petition for review with the US Court of Appeals for the District of Columbia Circuit on June 29. The company argues that the SEC is acting “arbitrarily and capriciously” under the Administrative Procedures Act (APA) in denying its proposal to convert the Grayscale Bitcoin Trust (GBTC) to an ETF. 

Grayscale Chief Legal Officer Craig Salm said in a Q&A posted on the company’s website this week that a court date could take between 12 months and two years.

Leah Wald, CEO of Valkyrie Funds, previously said in a series of June 30 Twitter posts that suing the SEC is not likely to succeed, noting that regulators could potentially approve a spot bitcoin ETF before Grayscale’s lawsuit ends.

Dave Nadig, financial futurist at VettaFi, previously told Blockworks the lawsuit “a very tough case for [Grayscale] to win,” noting that the agency has “extremely clear authority” to regulate rule-making about the activities of securities exchanges.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.jpg

Research

In this report, each analyst on the Blockworks Research team lays out their highest conviction thesis for 2025.

article-image

Bitcoin’s had a volatile month so far, but the inauguration might lead to a big move up

article-image

A theory on why the overperformance of rivals has little to do with Ethereum itself

article-image

Sponsored

A Guide to Diversification, Security, Service, Integrations & Compliance

article-image

The deal is one of the crypto sector’s recent, notable acquisitions involving crypto payments

article-image

Fidelity has had “productive conversations” across all client segments when it comes to rising bitcoin ETF usage in 2025

article-image

The bitcoin reserve has become one of the more talked-about promises Trump has made to the crypto industry