Grayscale Investments has secured a crucial win in its quest to convert its over-the-counter Grayscale Bitcoin Trust (GBTC) into a listed Bitcoin exchange-traded fund (ETF) against the United States Securities and Exchange Commission (SEC).

The SEC previously denied its GBTC application on the grounds that the products were not "designed to prevent fraudulent and manipulative acts and practices." Grayscale later filed a lawsuit, and the ruling was overturned.

According to court records on August 29, U.S. Court of Appeals Circuit Judge Neomi Rao granted Grayscale's petition for review and reversed the SEC's judgment denying the GBTC listing application.

Previously, Judge Rao stated that the SEC failed to "offer any explanation" as to why Grayscale was erroneous. The order does not, however, guarantee the eventual listing of a Grayscale spot Bitcoin ETF.

Grayscale CEO Michael Sonnenshein stated on X (previously Twitter) that the company's legal team is "actively reviewing" the court decision.

Grayscale's attempt to convert GBTC into a spot ETF was refused by the SEC on June 29, 2022. The following day, Grayscale's senior legal strategist, former U.S. Solicitor General Donald B. Verrilli Jr., petitioned the United States Court of Appeals for the District of Columbia Circuit for review.

Sonnenshein stated in a statement at the time that the firm was "deeply disappointed" and "vehemently disagreed" with the SEC's decision to deny its application.

Sources

https://cointelegraph.com/news/grayscale-wins-sec-lawsuit

https://www.wsj.com/finance/regulation/grayscale-wins-lawsuit-against-sec-over-bitcoin-etf-1b305cfa

https://www.docdroid.net/vrehbKf/dc-cir-22-1142-01208547571-0-pdf