Craig Salm Profile picture
Jan 13 9 tweets 4 min read
1/ As part of our suit challenging the SEC's decision to deny $GBTC conversion to a spot #bitcoin #ETF, @Grayscale just filed our Reply Brief with the DC Circuit Court of Appeals. Here’s what you need to know:
2/ This is the next major milestone since we filed the Petition for Review back in June, our Opening Brief in October, and the SEC’s Reply Brief in December. I shared a lot of important additional context earlier this week:
3/ In contrast to our Opening Brief, this Reply Brief is significantly shorter (41 pages vs. 100 pages) and addresses counterpoints made by the SEC in their brief, while also re-emphasizing key substantive arguments from our Opening Brief.

Here are some examples:
4/ The SEC arbitrarily treats spot #bitcoin ETFs differently from #bitcoin futures ETFs, even though both derive their pricing from the same underlying spot #bitcoin markets, as evidenced by *near perfect* (99.9%) correlations:
5/ The “significant market test” used in the context of #bitcoin ETFs, and only bitcoin ETFs, has been applied arbitrarily: in a relaxed manner for bitcoin futures ETFs, but a strict manner for spot bitcoin ETFs to get to a results-driven conclusion.
6/ The test in and of itself exceeds the SEC’s statutory authority and is arbitrary and unreasoned. The test is deeply flawed, essentially rewarding $BTC futures for being subject to two kinds of risks, while penalizing spot bitcoin for being subject to only one of those risks.
7/ Our proposal to convert $GBTC to a spot #bitcoin #ETF satisfies the requirements of the Exchange Act because it is designed to prevent fraud and manipulation, while protecting investors and the public interest.
8/ Although #bitcoin may be a relatively new asset, the legal issue here is straightforward. We further break down these arguments in our post here with brief attached: grayscale.com/gbtc-lawsuit-g…
9/ We will continue to keep our community apprised of developments in the litigation. The next milestone will be our final briefs due Feb. 2. While timing is uncertain, oral arguments may be as soon as Q2, final decision in DC Cir. App. Court could come by Fall.

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More from @CraigSalm

Jan 12
@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:
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.
Read 24 tweets
Nov 30, 2021
Last night our attorneys at Davis Polk sent a letter to the SEC arguing that approval of #Bitcoin futures-based ETFs, but not #Bitcoin spot-based ETFs, like $GBTC, is “arbitrary and capricious,” and therefore in violation of the Administrative Procedure Act (APA).
This is a new argument in the context of $BTC ETFs that wasn’t possible until the approval of the first #Bitcoin futures-based #ETF and subsequent rejection of yet another spot-based ETF. So, what is this new argument?:
The APA requires the SEC to treat *like* situations *alike* absent a reasonable basis for different treatment. This means the SEC must treat similarly situated investment products similarly.
Read 7 tweets

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