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Grayscale, SEC will voice oral arguments over GBTC ETF conversion in March

The next round of the legal process will begin sooner than expected.

According to a court filing dated Jan. 23, Grayscale and the Securities and Exchange Commission will soon have their oral arguments heard in court on the conversion of Grayscale Bitcoin Trust into an exchange-traded fund.

Grayscale’s request to turn its Bitcoin trust into an ETF and convert it into an ETF in June 2022 was rejected by the SEC.

Oral arguments will now be heard at the District of Columbia Court of Appeals on March 7 at 9:30 a.m. EST. Grayscale pointed out that the arguments were initially scheduled to be heard in the second quarter of this year.

Thirty days before that day, the composition of the argument panel will be revealed. Final briefs are due on February 3 – a little more than a month before the oral argument date.

Since October 2021, Grayscale has been aiming to turn its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund. Because the SEC had just approved the first Bitcoin futures ETF, the business chose to advance its application at that time.

Other Bitcoin future ETFs were swiftly approved, but Grayscale’s GBTC proposal detailed a Bitcoin spot ETF. As a result, it was subjected to increased regulatory scrutiny. Grayscale’s proposal was ultimately denied by the SEC in June 2022, claiming that Grayscale failed to offer assurances about market manipulation and investor protection.

Grayscale has lobbied hard since that rejection to get its ETF proposal reconsidered. The corporation filed a lawsuit and a petition for review right away. Over the last six months, the SEC and Grayscale have separately submitted various briefs in court.

Grayscale has also had public consultations on the subject. Grayscale CEO Michael Sonnenshein said in December that if the ETF conversion fails, Grayscale might buy back a share of GBTC. Grayscale has recently attempted to reassure the public that the ongoing bitcoin liquidity issue will not have an impact on its operations.

Grayscale BTC presently manages 643,572 BTC ($14.8 billion). However, its value has dropped dramatically over the last year, and it currently trades at a discount. These losses were partially mitigated by 10% gains the previous week.

 

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