Grayscale files brief in ETF suit against SEC, oral arguments may come within months

Grayscale filed a reply little successful its entreaty of the United States Securities and Exchange Commission (SEC) denial of its exertion to person its $12-billion Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin (BTC) exchange-traded money (ETF). The brief, filed successful the District of Columbia Circuit Court, addressed points made successful the SEC reply brief filed successful December and restated its ain arguments.

The SEC based its decision connected findings that Grayscale’s connection did not sufficiently support against fraud and manipulation. The bureau had made akin findings successful a fig of earlier applications to make spot-based BTC ETFs.

1/ As portion of our suit challenging the SEC's determination to contradict $GBTC conversion to a spot #bitcoin #ETF, @Grayscale conscionable filed our Reply Brief with the DC Circuit Court of Appeals. Here’s what you request to know:

— Craig Salm (@CraigSalm) January 13, 2023

Grayscale countered the denial with claims successful tribunal that the SEC had acted arbitrarily successful treating spot traded exchange-traded products otherwise from futures traded products. “There is simply a 99.9% correlation betwixt prices successful the bitcoin futures marketplace and the spot bitcoin market,” Grayscale stated successful its brief. It besides claimed the SEC had exceeded its authority:

“The Commission is not permitted to determine for investors whether definite investments person merit – yet the Commission has done conscionable that, to the detriment of the investors and imaginable investors it is charged to protect.”

Grayscale main ineligible serviceman Craig Salm said successful a tweet, “The lawsuit is moving swiftly. While timing is uncertain, oral arguments whitethorn beryllium arsenic soon arsenic Q2 [2023].” Grayscale applied to the SEC successful October 2021, and the bureau denied that application connected June 29.

Related: Grayscale CEO highlights 20% GBTC stock buyback enactment if ETF conversion fails

This filing comes astatine a clip erstwhile Grayscale has a bevy of ineligible issues earlier it. Fir Tree Capital Management sued Grayscale connected Dec. 6 demanding, among different things, that Grayscale springiness up its entreaty of the SEC decision. “That strategy volition apt outgo years of litigation, millions of dollars successful ineligible fees, countless hours of mislaid absorption time, and goodwill with regulators,” the ailment read.

Grayscale is owned by the Digital Currency Group, which is presently undergoing a fiscal squeeze.