Decision In Bitcoin Spot ETF Lawsuit In Fall 2023

The fate of Genesis Trading, Digital Currency Group (DCG) and the Grayscale Bitcoin Trust (GBTC) continues to hold by a thread after Cameron Winklevoss took one other step within the escalation over Gemini Earn customer funds with a brand new open letter on Tuesday. For Grayscale, nonetheless, the present battle can also be about continuing to fight on the front lines against the U.S. Securities and Exchange Commission.

Craig Salm, chief legal officer (CLO) at Grayscale, revealed in a Twitter thread today that Grayscale will “soon” file the following temporary in its lawsuit against the SEC, which is refusing to convert Grayscale Bitcoin Trust (GBTC) right into a spot Bitcoin ETF.

This may close GBTC’s massive discount and take away a priority for the beleaguered DCG group. In line with Salm, the case is moving forward “swiftly,” although the final word timing of a choice is uncertain. Oral arguments could come as early as Q2, while a final decision before the DC Circuit Court of Appeals could come by fall.

Grayscale Stays Optimistic

Within the lengthy thread, Salm explains that Grayscale stays positive that the appeals court will approve the conversion of GBTC right into a spot ETF since it is about “fair and equal treatment under the law.”

“Meaning events and speculation surrounding Terra/LUNA, 3AC, Celsius, Voyager, FTX, Alameda, BlockFi, Genesis Capital, Gemini, DCG, or anyone else are *not* relevant to the final word query the Court may have to reply,” says Grayscale’s CLO, who also states that the conversion is the perfect solution for all GBTC shareholders.

Grayscale expects that the conversion to a spot Bitcoin ETF will remove the present discount to NAV and unlock over $4 billion in value.

An ETF is certainly the perfect long-term way for GBTC to trace the worth of its Bitcoin. This has all the time been the roadmap for GBTC (and ETHE and our other crypto investment funds). That’s why the total resources of the firm are behind this effort.

In line with Salm, Grayscale has “the perfect lawyers” representing GBTC shareholders before the DC Circuit Court of Appeals, including Don Verrilli, former Solicitor General under the Obama administration (the lawyer representing the U.S. government before the Supreme Court), his team at MTO, and Davis Polk.

All Options For The Bitcoin Trust Are On The Table

While Salm expresses optimism, he also makes it quite clear that Grayscale is exploring other ways to return capital to GBTC shareholders if the lawsuit against the SEC is unsuccessful.

These options include a tender offer for a portion of GBTC’s shares, given certain relief and approvals from the SEC. Although this will not be the favored goal, nonetheless, it could be crucial for some circumstances, Salm said.

Pursuing an alternate path would deviate from $GBTC’s long-held ETF aspirations and wouldn’t be a really perfect end result, […] Nonetheless, we made this commitment in continuing to arrange for all possible $GBTC scenarios and to offer clarity for investors.

At the identical time, Grayscale’s CLO identified that the corporate cannot simply redeem shares. Anyone calling for this “doesn’t understand the complexities of securities laws and its tender offers rules (distinct from Reg M).”

Despite the continuing uncertainty surrounding Grayscale and DCG, the Bitcoin price is experiencing a rally today, likely related to expectations for a low inflation print. Today at 8:30 am EST, US CPI data for December will probably be released.

At press time, BTC was up 4.5% over the past 24 hours and stood at $18,172.

Bitcoin is up 4.5% today, 1-day chart | Source: BTCUSD on

Featured image from CoinsCapture / Medium, Chart from

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