“Grayscale’s pursuit for a spot Bitcoin ETF takes an intriguing turn as a lawsuit against its parent company adds a layer of complexity to the potential approval process.”
Grayscale, the digital currency investment company, has filed a new application with the Securities and Exchange Commission (SEC) for its Grayscale Bitcoin Trust (GBTC) to operate as a spot Bitcoin ETF listed on the New York Stock Exchange. The company is seeking regulatory approval for its S-3 form in order to operate as an ETF. Grayscale expressed its readiness to operate as an ETF and looks forward to collaborating with the SEC on these matters. This filing comes after Grayscale’s recent court victory over the SEC, where the agency was told it had no basis for denying Grayscale’s request to convert GBTC into a spot Bitcoin ETF. The SEC chose not to appeal the ruling, increasing the likelihood of a spot Bitcoin ETF being approved in the coming months. However, Grayscale’s position as one of the first to receive approval remains uncertain due to a lawsuit filed by the New York State Attorney General against Grayscale’s parent company, Digital Currency Group (DCG), along with Gemini and DCG subsidiary Genesis. The lawsuit alleges that DCG was involved in defrauding investors of over $1 billion and seeks to bar DCG from engaging in securities and commodities-related business in New York. Despite these legal challenges, GBTC’s discount compared to its net asset value is closing, indicating growing investor confidence in the product. The exchange-traded product was trading down less than 1% at around $22.18 as of Thursday morning.