Grayscale filed a retaliation in its appeal against the United States Securities and Exchange Commission’s (SEC) rejection of its request to convert its $12 billion Grayscale Bitcoin (GBTC) trust into a spot-based Bitcoin (BTC) exchange-traded fund ( ETF) to convert ). The brief, filed in the District of Columbia Circuit Court, addressed points made in the SEC’s response brief filed in December and repeated its own arguments.
The SEC based its decision on findings that Grayscale’s proposal did not provide adequate protection against fraud and tampering. The agency had made similar findings in a number of previous applications to create spot-based BTC ETFs.
1/ As part of our appeal against the SEC’s decision to refuse to convert $GBTC into a spot #bitcoin #ETF, @Grayscale has just filed our reply letter with the DC Circuit Court of Appeals. Here’s what you need to know:
— Craig Salm (@CraigSalm) January 13, 2023
Grayscale countered the rejection with allegations in court that the SEC acted arbitrarily by treating exchange-traded spot-traded products differently than futures-traded products. “There is a 99.9% correlation between prices in the bitcoin futures market and the spot bitcoin market,” Grayscale explained in his letter. It also claimed the SEC had exceeded its authority:
“The Commission is not allowed to decide for investors whether certain investments make sense – yet the Commission has done just that, to the detriment of the investors and potential investors it is charged with protecting.”
Craig Salm, Grayscale’s Chief Legal Officer, said in a tweet: “The case is progressing rapidly. While the timing is uncertain, oral hearings could take place as early as Q2 [2023].” Grayscale filed a filing with the SEC in October 2021, and the agency denied that filing on June 29.
Related: Grayscale CEO highlights 20% GBTC stock buyback option if ETF conversion fails
Fir Tree Capital Management sued Grayscale on December 6, demanding, among other things, that Grayscale drop its appeal of the SEC’s decision. “This strategy will likely cost years of litigation, millions of dollars in legal fees, countless hours of lost management time and goodwill from regulators,” the complaint reads.
Grayscale is owned by Digital Currency Group, which is currently in dire financial straits.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.