Grayscale prepares for court showdown with US SEC over Bitcoin ETF

• The crypto asset management firm quickly instituted legal action against the US SEC last month over its spot Bitcoin ETF proposal rejection.
• Recently, Grayscale held a Q&A session to address investors’ concerns over a spot Bitcoin ETF.

Currently, the appeal court is examining Grayscale’s application to analyze the SEC’s rejection decision. But Grayscale has stated that it won’t mind heading to the US supreme court if it loses the case at the appeal court. The crypto asset management firm could also use the “en banc” option.

An en banc hearing would involve a group of judges within the DC metropolis that would discuss the matter together before taking a final decision. This hearing differs from the normal hearing, where any judge gives a verdict about the matter. However, Grayscale can’t explore this option unless there is a strong reason for it or other judges couldn’t arrive at a decisive judgment about the case.

The US SEC hasn’t shown any interest in approving any spot Bitcoin ETF proposal till now. Nevertheless, many crypto firms have submitted their spot Bitcoin ETF proposals hoping that the SEC will approve one of these proposals someday. However, Grayscale is determined to have its spot Bitcoin ETF since it is the replacement for its famous Grayscale bitcoin trust (GBTC).

An approximate timeline of the court’s verdict

During the Q&A session, one of the questions Grayscale received was an estimate of the length of the court case. In its response, Grayscale remarked that it isn’t sure about the timing. However, previous experiences from federal litigations indicate that resolutions usually take an average of two years.

However, the firm hopes this case will be in its favor no matter how long it takes to arrive at a final decision. The crypto market has been under massive correction since the start of the year. Hence, regulators are more critical of the operations going on in the market.

Also, many of them are pushing their crypto policy adoptions faster than before. Many industry analysts predict that the US SEC will still approve a spot Bitcoin ETF as the crypto market matures over time. A Ycharts data showed that the sec’s rejection of Grayscale’s proposal caused a 35 percent drop in the shares of Grayscale’s bitcoin trust (GBTC).

While speaking in an interview earlier last week, Grayscale CEO, Michael Sonnenschein, said that Grayscale’s intention is for the sec to give its product more investor protection by holding it at a higher standard.

He further said the conversion of GBTC to a spot Bitcoin ETF would unlock a billion-dollar worth of “unrealized share value.” Like other crypto firms, Grayscale is also feeling the heat of the current crypto winter. Last week, it announced the removal of five digital currencies from its large-cap digital fund.

According to the announcement, the move is an attempt at readjusting the asset management firm’s portfolio to survive the current crypto bear market. Uniswap (UNI), Bitcoin Cash (BCH), Polkadot (DOT), Chainlink (LINK), and Litecoin (LTC) are the five cryptos removed by Grayscale.