Grayscale Urges SEC to Approve GBTC Conversion to Bitcoin ETFs

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  • Grayscale Investments urges the SEC to approve its Bitcoin ETF application.
  • The company’s legal team claims that the SEC has no grounds to reject Grayscale’s request for GBTC conversion.
  • The team reiterates that there is no rationale to differentiate between Bitcoin futures ETPs and spot Bitcoin ETPs.

Grayscale Investments reportedly urged the Securities and Exchange Commission (SEC) to approve the company’s application for the conversion of Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF), claiming that the regulators hold “no grounds” to reject the request. In an official letter, Grayscale’s legal team asserted that GBTC is ready to operate as a Bitcoin spot ETF upon approval from the SEC.

Earlier today, Grayscale took to X (Twitter) to share the letter, and highlight that the SEC’s decision regarding its application has been pending for almost three times the permitted period as per the Exchange Act. The letter spotlighted that there is no identifiable rationale that could distinguish between Bitcoin futures exchange-traded products (ETPs) and spot Bitcoin ETPs, adding that if there existed such a difference, it would have surfaced by now in one of the fifteen Commission orders that rejected spot Bitcoin Rule 19b-4 filings even after bitcoin futures ETPs began trading”.

Grayscale’s action came following a recent court ruling that found the SEC’s rejection of Grayscale’s ETF application was unjustified, and ordered the regulator to re-evaluate the petition. Highlighting the large number of GBTC investors being kept in suspense by the SEC amid the recent rush of competing Bitcoin ETF applications, the company reiterated its position in the letter:

And so we hope you will agree that the best use of resources now is for the Commission to issue an order approving NYSE Arca’s Rule 19b-4 filing and authorize the staff to work with Grayscale and NYSE Arca to finalize the prompt listing of the Trust’s shares. We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.

In an interview, Grayscale CEO Michael Sonnenshein commented that the conversion of GBTC to an ETF was the company’s “ultimate goal”. He added, “An ETF format was what we always conceived of and that’s always what we intended to do even before we launched the product back in 2013”.