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Grayscale Rekindles SEC Talks for ETF Approval Following Court Victory Over ‘Arbitrary’ Denial
- Grayscale is looking to convert its Bitcoin Trust into a Spot ETF and has begun talks with the Securities and Exchange Commission (SEC).
- Grayscale won a court battle earlier this year after the SEC arbitrarily rejected its previous applications for crypto-based funds.
- The company believes it’s only a matter of time before spot ETFs are approved and hit the markets.
The SEC hasn’t been far from the crypto news cycle in 2023, with the United States regulatory body taking several big industry players to court over the past ten months. Perhaps the biggest talking point is the potential release of a spot Bitcoin ETF, awaiting regulatory approval from the SEC. Several big-name financial institutions are seeking the acceptance of such a fund, including BlackRock, Invesco and Grayscale.
Grayscale in Talks with the SEC Over Fund Conversion
It’s been reported recently that financial managers Grayscale have been in discussions with the Securities and Exchange Commission (SEC) regarding releasing a spot Bitcoin ETF. Grayscale has a slight advantage over other institutions here for two reasons:
- The company wishes to convert its existing Bitcoin fund (the futures-based trust GBTC) into a spot ETF rather than create an entirely new product.
- Grayscale emerged victorious in a court battle against the SEC earlier this year.
Specifically, Grayscale is in direct contact with the SEC’s Division of Trading and Markets and Division of Corporate Finance – and reportedly has been since they “won” their court case in August earlier this year.
“Matter Of When, Not If”
The legal battle between Grayscale and the SEC kicked off earlier this year, when the investment firm’s application to launch a crypto ETF containing digital assets was rejected. Upon taking the SEC to court over their rejection, it was ruled that the regulatory body had no real reason to turn down the application in what was a “capricious and arbitrary” denial.
Since then, the relationship between the SEC and Grayscale has improved substantially, and it appears extremely likely that a spot Bitcoin ETF will be approved sooner rather than later.
Grayscale’s Chief Legal Officer, Craig Salm, stated:
Overall it’s been a good interaction [with the SEC] and it’s no longer a matter of if, it’s a matter of when [the ETF will be approved]
Craig Salm,Grayscale 
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
