Grayscale provided a brief response in its appeal to the US Securities and Exchange Commission (SEC) by denying its request to convert $12 billion from the Grayscale Bitcoin Trust (GBTC) into a Bitcoin (BTC) exchange-traded fund (BTC) in cash). The document, filed in Circuit Court for the District of Columbia, embroidered points raised in the SEC’s response filed in December and reintroduced its own arguments.
The SEC based its decision on findings that Grayscale’s proposal did not adequately protect against fraud and manipulation. The agency has made similar discoveries in several previous applications for creating BTC ETFs on a point basis.
1/ As part of our call to appeal the SEC’s decision of refusal GBTC dollars Transfer to a place # Bitcoin #ETFAnd @employee Just filed our response brief with the D.C. Circuit Court of Appeals. Here’s what you need to know:
—Craig Salem (@CraigSalm) January 13, 2023
Grayscale responded to the denial with allegations in court that the SEC acted arbitrarily in treating exchange-traded products differently from futures-traded products. “There is a 99.9% correlation between prices in the bitcoin futures market and the bitcoin spot market,” Grayscale states in its summary. He also alleged that the SEC had exceeded its authority:
“The Commission is not allowed to decide for investors whether certain investments have merits – but the Commission has done so entirely at the expense of the investors and potential investors it is supposed to protect.”
Grayscale Legal Director Craig Salem He said In a tweet: “The case is moving fast. While the timing is uncertain, claims of oral occurrence may occur in the second trimester.” . Grayscale was filed with the SEC in October 2021, and the agency denied that request on June 29.
Fir Tree Capital Management filed a lawsuit against Grayscale on December 6 demanding, among other things, that Grayscale be stopped from appealing the SEC’s decision. “This strategy has the potential to cost years of litigation, millions of dollars in legal fees, countless lost management hours, and goodwill with regulators,” the complaint reads.
Grayscale is owned by Digital Currency Group, which is currently facing financial difficulties.