Grayscale approaches the SEC after legal breakthrough

Grayscale has approached the SEC asking for swift action following a recent legal victory. The company wants to convert its flagship fund, the Grayscale Bitcoin Trust (GBTC), into a spot exchange-traded fund (ETF).

Grayscale's lawyers have written to the Securities and Exchange Commission that they believe the trust's nearly one million investors are entitled to a level playing field and are asking it to act quickly. This comes after Grayscale indicated they no longer have a legal case to convert their flagship asset management fund, the Bitcoin fund, to a spot exchange-traded fund (ETF).

Op 5 September sent Grayscale's legal team a letter to the SEC requesting a meeting to discuss next steps after the regulator lost the legal battle regarding the conversion of the Grayscale Bitcoin Trust (GBTC).

Now that the Court of Appeals has spoken, there is no reason why a Bitcoin futures ETP should be treated differently than a spot Bitcoin ETP, according to the legal analysis previously adopted by the Commission in rejecting spot Bitcoin ETPs

Grayscale believes the SEC should conclude that there are "no grounds" to treat the GBTC differently from Bitcoin futures ETFs whose applications have previously been approved by the Commission. On August 29 ruled against the SEC's rejection by a U.S. appeals court of Grayscale's application to convert their GBTC into a spot Bitcoin ETF.

Grayscale stressed that if there was a reason to reject the conversion other than the Exchange Act's requirement to prevent fraudulent and manipulative acts, it would have already been made clear.

We believe that reason would have already been stated in one of the 15 Commission orders that rejected previous applications for spot Bitcoin, even after trading in Bitcoin futures ETPs began.

Grayscale emphasized that their fund conversion request has been pending for nearly three times longer than what SEC regulations require. Joseph A. Hall, the same person who in July called on the SEC to collectively approve all pending ETF applications, concluded his recent letter by saying, "We believe that the Trust's nearly one million investors are entitled to a level playing field and deserve it as soon as possible."