SEC Filed A First Legal Brief In The Grayscale Lawsuit

Grayscale Investments said that the Securities and Exchange Commission had submitted its first legal brief in its case against the SEC for rejecting its application for a spot Bitcoin exchange-traded fund.

Grayscale’s proposal to convert its flagship GBTC fund into an ETF was earlier denied by the SEC in late June, and the company has refused the investors who already owned its shares in the trust.

The company said in a statement:

“This is the next milestone in our ongoing litigation following the filing of our opening brief on October 11 and the supporting amicus briefs shortly after.”

The agency claimed in its response brief that its rejection was fair, reasonably explained, and backed by significant evidence and that there was no conflict in the Commission’s rejection of Grayscale’s spot ETP while having authorized two CME Bitcoin futures ETPs.

Futures and spot-based Bitcoin funds, according to the SEC, are fundamentally distinct products.

Grayscale responded to the SEC filing by restating its opening brief’s claims and accusing the agency of creating an unequal playing field for investors by accepting Bitcoin futures-based ETFs but consistently refusing spot Bitcoin ETFs.

The SEC stated that its rejection of Greyscale’s proposed ETF reflected no unacceptable, merit-based criticism of Bitcoin as an investment.

On December 7, the price of GBTC relative to the Bitcoin it really owns reached an all-time low, with the discount ratio reaching 47.3%.

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