Thread by @CraigSalm

@Grayscale will soon file the next brief in our suit challenging SEC's decision to deny $GBTC conversion to a spot #Bitcoin #ETF. The case is moving swiftly. While timing is uncertain, oral arguments may be as soon as Q2. Final decision in DC Cir. App. Court could come by Fall.🧵

2/ A lot has happened in the #crypto industry since we first filed our lawsuit in June ‘22, but I continue to believe in the strength and merits of our common sense and compelling legal arguments:

https://twitter.com/CraigSalm/status/1581252278350098432?s=20&t=EkVrnuzWBfoX6sDHsq_fdw

3/ Our lawsuit is about determinations on *questions of law*. Despite the SEC’s historical reluctance, or current perceptions of the #crypto industry more generally, this is a legal case about fair and equal treatment under the law.

4/ That means events and speculation surrounding Terra/LUNA, 3AC, Celsius, Voyager, FTX, Alameda, BlockFi, Genesis Capital, Gemini, DCG, or anyone else are *not* relevant to the ultimate question the Court will have to answer:

5/ Did the SEC act arbitrarily and capriciously, and discriminate against issuers, in denying the conversion of $GBTC to a spot #bitcoin #ETF after it approved ETFs that hold bitcoin futures (a derivative of $BTC)?

That’s it.

6/ Americans want and deserve spot #bitcoin ETFs, as they would further open up access to $BTC for those that want to hold it in the form of a security, in their brokerage or retirement account, thru regulated investment vehicles, with SEC reports, audited financials and tax docs

7/ That may not be you, and that's okay, but if you support the Bitcoin protocol, I think it's clear why you would want more ways for people to access $BTC –
even if they're wrapped in something else on a 1:1 basis. We are fighting for all those who believe in #Bitcoin's future

8/ So if you’re long #Bitcoin – whether that’s because you self-custody your private key(s) on a piece of paper, cryptosteel, hardware wallet, a brainwallet in your head, or entrust them to a third party – I encourage you to support our #ETF case.

9/ But this case is *most important* for the 850k+ shareholders who hold $GBTC. That’s because we expect converting GBTC to a spot #bitcoin ETF to effectively close the current discount to NAV and unlock over $4 billion of value.

10/ An ETF is unquestionably the best long-term way for $GBTC to track the value of its #bitcoin. This has always been the roadmap for GBTC (and $ETHE and our other #crypto investment funds). That’s why the full resources of the firm are behind this effort.

11/ We have the best legal minds representing $GBTC shareholders in the DC Circuit Court of Appeals, including Don Verrilli, former Solicitor General under the Obama administration, his team at MTO and Davis Polk.

12/ In legal circles, Don needs no introduction. For those who don’t know, the Solicitor General is the attorney who represents the US Government before the Supreme Court. He and I talked about the case after he joined our team last Summer: grayscale.com/don-verrilli-c…

13/ And for anyone who doubts our commitment, I encourage you to revisit our 100 page Opening Brief. TLDR can be found in the Intro (pp. 12-14) and Summary of Argument (pp. 30-33), which get to the importance of this case and core of our arguments: grayscale.com/wp-content/upl…

14/ Our Opening Brief was bolstered by 5 Amicus Briefs, which included valuable, unique, and high-quality perspectives from the TradFi sector, #crypto trade associations, think tanks, advocacy groups, academics and former SEC, CFTC and OCC regulators:

https://twitter.com/CraigSalm/status/1582755063554273282?s=20&t=FrQu_4lQTXdeVt7MhhyzDw

15/ @BlockchainAssn, @coinbase, @DigitalChamber, @NYSE, @ProgressChamber, @USChamber and others built off the record breaking 11.6k+ comment letters we received during the ETF application process last year in favor of GBTC’s conversion to a spot $BTC ETF: sec.gov/comments/sr-ny…

16/ While we remain confident the Court will rule in our favor, we've also committed to exploring alternative paths to returning capital to $GBTC shareholders if our legal challenge is not successful.

17/ These options could include a tender offer for a portion of $GBTC shares, subject to receipt of certain relief and approvals from the SEC, as outlined by @Sonnenshein: grayscale.com/end-of-year-ce…

18/ Pursuing an alternative path would deviate from $GBTC's long-held ETF aspirations and would not be an ideal outcome, as it would effectively mean that regulators have shut the door on efficient access to $BTC through US-regulated investment vehicles.

19/ And for those who have a long-term investment horizon and want to maintain their #bitcoin exposure, the ETF structure is a far better outcome vs. partially exiting through a tender offer.

20/ Nonetheless, we made this commitment in continuing to prepare for all possible $GBTC scenarios and to provide clarity for investors, while holding firm in our belief that a spot #bitcoin ETF is a matter of when, not if.

21/ As a side note: anyone telling you $GBTC can simply redeem shares today is most likely not a lawyer, and doesn’t understand the complexities of securities laws and its tender offers rules (distinct from Reg M).

22/ Just as there are approvals needed to convert $GBTC to an ETF and operate an ongoing redemption, there are other distinct approvals needed for GBTC to fairly return capital to shareholders in other ways, such as through a tender offer.

23/ To reiterate, converting $GBTC to a spot #bitcoin ETF is the best long-term way for it to track the value of its $BTC. Our case is moving forward swiftly, we have strong, common sense and compelling legal arguments and we’re optimistic that the Court should rule in our favor.

24/ We will continue to fight for this for our investors and the #bitcoin community. As always, those interested can stay apprised of the litigation here: grayscale.com/gbtc-lawsuit/