Grayscale has reached out to the Securities and Exchange Commission (SEC), expressing its belief that there are no remaining legal grounds to oppose the transformation of its primary Bitcoin fund, known by its ticker symbol BTC and currently valued at $25,739. Grayscale aims to convert this fund into a traditional exchange-traded fund (ETF).
On September 5th, legal representatives from Grayscale sent a letter to the SEC, suggesting a meeting to discuss the next steps after the SEC’s recent legal setback involving the Grayscale Bitcoin Trust (GBTC).
Grayscale’s communication to the SEC underlines that, following the Court of Appeals’ ruling, there appears to be no clear rationale distinguishing between a Bitcoin futures Exchange Traded Product (ETP) and a standard spot Bitcoin ETP, based on the legal criteria previously used by the SEC to reject spot Bitcoin ETPs. Grayscale argues that there should be no valid reasons for the SEC to treat GBTC differently from Bitcoin futures ETFs, which have previously received the Commission’s approval.
Additionally, Grayscale points out that if there were any additional justifications for rejecting the conversion, aside from the requirement in the Exchange Act to prevent fraudulent activities, these would have already been revealed. Grayscale notes that none of the fifteen Commission orders denying spot Bitcoin applications after Bitcoin futures ETPs began trading disclosed any such reasons.
Grayscale also highlights the fact that its application for fund conversion has been pending for nearly three times longer than the duration specified by the SEC’s regulations, as reported by Cointelegraph.
It’s important to mention that a federal appeals court in Washington DC recently ruled that the Securities and Exchange Commission (SEC) erred when it rejected Grayscale’s application to convert its primary investment entity, the Grayscale Bitcoin Trust, into an ETF.
In the wake of this August 29th court ruling, the discount of GBTC, which measures the extent to which an ETF trades above or below its net asset value, has decreased to 19.9%.