SEC should ‘expeditiously’ approve GBTC conversion, says Grayscale

After winning its court case against the regulator, the crypto firm asks for a meeting with SEC “as soon as practicable” to discuss its bitcoin ETF plan

article-image

chase4concept/Shutterstock modified by Blockworks

share

After notching a court win over the SEC last week, Grayscale Investments has asked to meet with the agency “as soon as practicable to discuss the way forward” for its planned bitcoin ETF.

DC Circuit Court of Appeals judges determined in a ruling last week that the SEC’s decision to approve bitcoin futures funds — but not Grayscale’s proposed conversion of its Bitcoin Trust (GBTC) to an ETF — was “arbitrary and capricious.”

Joseph Hall, partner at Davis Polk & Wardwell, a law firm representing Grayscale, wrote in a Tuesday letter to the SEC that “there are no grounds” for the regulator to treat GBTC differently than bitcoin futures funds. 

He added the SEC should “move expeditiously to approve the trust’s Rule 19b-4 filing,” a form used to inform the SEC of a proposed rule change.  

Loading Tweet..

An SEC spokesperson told Blockworks last week that the regulator was “reviewing the court’s decision to determine next steps.” The commission did not immediately return a request for comment on the new letter. 

The SEC has previously cited concerns over fraud and manipulation in the underlying spot market. But the correlation between bitcoin futures prices and spot market prices shows that “fraud in the spot market would present identical problems for a bitcoin ETP and a bitcoin futures ETP,” according to last week’s court decision.  

Read more: What the judges said: unpacking the Grayscale court ruling 

The favorable court ruling for Grayscale does not compel the SEC to approve GBTC’s conversion to an ETF. Rather, it informs the commission that it can’t deny the conversion on the reasons it previously used.

“If any other reason could be offered in attempting to differentiate spot bitcoin ETPs from bitcoin futures ETPs — whether based on the Exchange Act’s requirement that rules be ‘designed to prevent fraudulent and manipulative acts and practices’ or otherwise — we are confident that it would have surfaced by now in one of the [15] commission orders that rejected spot bitcoin Rule 19b-4 filings even after bitcoin futures ETPs began trading,” Hall said in the letter.

Grayscale Chief Legal Officer Craig Salm said in an interview with Bloomberg last week he was confident in a Grayscale spot bitcoin ETF’s ability, if approved, to compete with proposed products by competitors such as BlackRock and Fidelity.   
Hall’s latest letter comes after the lawyer told the SEC in a July letter that approving certain spot bitcoin ETF proposals before others would give the first funds an “unfairly discriminatory and prejudicial first-mover advantage.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

Sponsored

Fluence is a decentralized marketplace that connects businesses requiring enterprise-grade computing power with professional infrastructure providers

article-image

What if growth goes exponential while you’re hiding in gold and bitcoin?

article-image

While Compass Point analysts downgrade its Circle price target, Jefferies initiates Galaxy coverage with ‘buy’ rating

article-image

Friday News potpourri: Here’s what’s shaping up across Bitcoin, Ethereum and beyond.

article-image

A little inside baseball about crypto news