McHenry signals support for Grayscale ruling

Patrick McHenry has been a loud voice on crypto, once repeatedly asking Gary Gensler whether ETH was a security or a commodity

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Rep. Patrick McHenry, R-N.C., weighed in on Grayscale’s court victory against the US Securities and Exchange Commission over its application for a bitcoin ETF.

McHenry is also Chair of the House Financial Services Committee and in that role, he’s introduced legislation to regulate crypto. That includes a stablecoin bill that made it out of committee in July with bipartisan support. 

McHenry name dropped the Financial Innovation and Technology for the 21st Century Act in a Tuesday X post, which if passed, would begin to delineate the responsibilities of the SEC and CFTC when it comes to regulating crypto. That bill has cleared two House committees so far.

Read more: Heated 7-hour markup ends in bipartisan support for stablecoin bill

Referencing the Grayscale case, McHenry wrote that SEC chair Gary Gensler’s “crusade against the digital asset ecosystem is falling apart under scrutiny from the courts.”

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Rep. Warren Davidson, R-Ohio, was a bit more forceful in his rebuke of the SEC, reiterating his call to fire Gensler.

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Former Senator Pat Toomey, who left office in January 2023, was also chimed in with support for the Grayscale decision. 

The court, he wrote, “upheld the rule of law and properly served American consumers by vacating the ‘arbitrary and capricious’ decision of the SEC denying Grayscale’s application to convert its Bitcoin Trust to an ETF. 

Grayscale sued the SEC in June 2022 for rejecting the crypto asset manager’s proposal to transition its Bitcoin Trust (GBTC) into an ETF. As part of that suit, it issued a petition for review, asking the court to look over the SEC’s decision.

A three-judge panel for the DC Circuit Court of Appeals granted Grayscale’s petition for review Tuesday, while also ordering that the SEC’s “order be vacated.” 

This ruling doesn’t mean that Grayscale is guaranteed to convert GBTC into a spot bitcoin ETF. It simply means that the SEC ​​must review Grayscale’s application to do so.

Coinbase chief legal officer Paul Grewal also weighed in on Tuesday’s decision, saying that courts are crypto’s “last, best hope.”

“I’ll say it again — they are not perfect but when it comes to protecting the rule of law, the courts remain our last, best hope,” Grewal wrote.

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