Grayscale Files Brief in Lawsuit Against SEC for Rejecting Its Bitcoin Spot ETF

Grayscale filed a written response in its enchantment in opposition to the US Securities and Change Fee’s (SEC) denial of its request to transform its $12 billion Grayscale Bitcoin Belief (GBTC) into an exchange-traded fund (ETF). Bitcoin (BTC) spot. The transient, filed within the Circuit Courtroom for the District of Columbia, addresses points raised within the SEC’s response transient filed in December and reiterates its personal arguments.

The SEC based mostly its determination on the conclusion that Grayscale’s proposal didn’t sufficiently shield in opposition to fraud and manipulation. The company had reached comparable conclusions in a number of earlier purposes to create a spot BTC ETF.

Grayscale opposed the denial, arguing in court docket that the SEC had acted arbitrarily in treating spot exchange-traded merchandise in another way from futures-based exchange-traded merchandise. “There’s a 99.9% correlation between the costs of the Bitcoin futures market and its spot market,” Grayscale acknowledged in his writing. He additionally claimed that the SEC had overreached its duties:

“The Fee isn’t empowered to determine for buyers whether or not sure investments have benefit – but the Fee has finished simply that, to the detriment of the buyers and potential buyers it has been charged with defending.”

Grayscale’s authorized director, Craig Salm, stated in a tweet: “Case is shifting shortly. Though date unsure, oral arguments might be as early as Q2 2023.” Grayscale filed with the SEC to launch a Bitcoin spot ETF in October 2021, and the company denied that request on June 29, 2022.

Fir Tree Capital Administration sued Grayscale on December 6 demanding, amongst different issues, that it waive its enchantment of the SEC’s determination. “That technique will seemingly price years of litigation, tens of millions of {dollars} in legal professional charges, numerous hours of misplaced administration time, and goodwill with regulators,” the lawsuit stated.

Grayscale is owned by the Digital Foreign money Group, which is at the moment experiencing a monetary disaster.

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