• GBTC submitted a 41-page Reply Brief with the US District Court of Appeals.
  • Grayscale argued that the SEC acted arbitrarily in discriminating spot bitcoin.
  • Grayscale says spot ETF would unlock over $4 billion value for 850,000 investors. 

Grayscale Bitcoin Trust (GBTC), the largest institutional crypto fund, has filed a Reply Brief with the US District Circuit Court of Appeals, challenging the decision of the US regulator that denied its conversion to a spot Bitcoin fund. 

According to the official publication, Grayscale argued that the US Securities and Exchange Commission (SEC) acted arbitrarily and capriciously and discriminated against issuers in denying the conversion of GBTC to a spot exchange-traded fund (ETF) after approving Bitcoin futures.

Grayscale’s chief legal officer, Craig Salm, contended that Bitcoin spot and futures derive their pricing from the same underlying spot crypto markets with near-perfect 99.9% correlations.

The Reply Brief concluded, saying:

Last June, the SEC rejected Grayscale’s application to convert from Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF). The commission reached this decision after GBTC’s committee failed to answer critical questions concerning preventing market manipulation and investor protection. 

Since then, Grayscale has taken many actions to upturn the SEC ruling. In October 2022, it filed an Opening Brief, the first substantive document submitted to the court to explain the legal basis of Grayscale’s intention.

Grayscale believes converting GBTC to a spot bitcoin ETF would unlock over $4 billion value for more than 850,000 investors. According to GTBC, spot Bitcoin ETFs would further open up BTC for those who want to hold it as security in their brokerage or retirement account.

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