Cryptocurrency

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

Grayscale and the U.S. Securities and Exchange Commission will soon be holding oral arguments in court regarding the conversion of the Grayscale Bitcoin Trust into an exchange-traded fund. January 23rd.

The SEC has decided to reject a proposal from Grayscale to allow the company to convert Bitcoin trusts into ETFs in June 2022.

These oral arguments are now scheduled to be heard in the Court of Appeals for the District of Columbia on March 7 at 9:30 am EST.Grayscale works only if the argument is was originally scheduled It is expected to be heard by the second quarter of this year.

The composition of the hearing panel will be revealed 30 days prior to that date. His final report is due on February 3rd — more than a month before the date of oral argument.

Grayscale has been trying to convert the Grayscale Bitcoin Trust (GBTC) into an exchange traded trust since October 2021. The SEC had just approved the first Bitcoin futures ETF, so the company chose to go ahead with the proposal at that time.

While other Bitcoin future ETFs received immediate approval, Grayscale’s GBTC proposal described a Bitcoin spot ETF. As a result, regulatory scrutiny has become even more intense. The SEC ultimately rejected Grayscale’s proposal in June 2022, arguing that Grayscale provided no guarantees regarding market manipulation and investor protection.

Since its rejection, Grayscale has aggressively sought a reconsideration of the ETF proposal. The company immediately filed a lawsuit and sought review. The SEC and Grayscale have each submitted various briefs to the court over the past six months.

Grayscale has also engaged the public on this issue. CEO Michael Sonnenshein suggested in December that Grayscale could buy back some of his GBTC if the conversion to an ETF fails. Most recently, Grayscale sought to assure the public that the ongoing cryptocurrency liquidity crisis would not affect its efforts.

Grayscale BTC currently manages 643,572 BTC ($14.8 billion). However, its value has fallen significantly over the last year and is now trading at a discount.

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