Patrick Daugherty Comments on Federal Court’s Recent Crypto Ruling Against SEC

Foley & Lardner LLP partner Patrick Daugherty is quoted in the CoinDesk article, “SEC’s Grayscale Court Rout Puts Agency in Will-They, Won’t-They Role Starring Gensler,” discussing a federal court’s recent ruling that the U.S. Securities and Exchange Commission (SEC) must review its rejection of a digital currency asset management company attempt to convert its bitcoin trust into an exchange-traded fund (ETF).

“‘Arbitrary and capricious’ are not words that [SEC Chair Gary Gensler] should want to hear from federal courts, but that’s what this unanimous panel of judges called his agency’s judgment,” said Daugherty, chair of Foley’s Digital Assets, Web3 & NFTs area of focus with the firm’s Innovative Technology Sector. “The SEC failed to explain why it could approve ETFs based on bitcoin futures but not an ETF based on bitcoin. Since like cases must be treated alike in America, the SEC lost.”

“After losing this case, the smart play for the SEC will be to approve Grayscale’s application speedily,” Daugherty added.