STAMFORD, Conn., Oct. 11, 2022 (GLOBE NEWSWIRE) — Grayscale Investments®the world’s largest digital currency asset manager, today filed its opening brief in the United States Circuit for the District of Columbia Circuit challenging the Securities and Exchange Commission’s (“SEC” or “the Commission”) decision to convert from to deny Grayscale Bitcoin Trust (BTC) (OTCQX: GBTC) to a spot bitcoin ETF*.

The opening letter explains the legal basis for Grayscale’s arguments. On June 29, 2022, the SEC denied Grayscale’s request to convert GBTC to a spot ETF. On the same day, Donald B. Verrilli, Jr., Grayscale’s senior legal strategist, former US Attorney General and partner at Munger, Tolles & Olson, filed a request for review to begin the litigation.

Today’s Executive Summary sets out why the SEC’s differential treatment of these products was arbitrary, discriminatory and beyond the Commission’s statutory powers; It also argues that the test the SEC has applied to bitcoin-related ETFs and only bitcoin-related ETFs is flawed and has been applied inconsistently with a “particular rigor” to identify bitcoin ETFs.

“Although Bitcoin may be a relatively new asset, the legal issue here is simple,” the letter explains.

In 2021 and 2022, the SEC approved several bitcoin futures ETFs but repeatedly rejected ETFs that directly hold bitcoin or recognize bitcoin ETFs, including Grayscale’s request to convert GBTC. The letter highlights that both bitcoin futures and spot bitcoin generate their price based on overlapping indices, so the spot price of bitcoin in each product is subject to the same risks and safeguards.

“This blatant arbitrariness can neither be justified nor reconciled with the Commission’s mandate to treat the same cases in the same way. Rather, it can only be understood as a substantive judgment on the merits of a spot bitcoin investment – the kind of substantive judgment that is outside the purview of the Commission…