Thread by @CraigSalm

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:

https://twitter.com/CraigSalm/status/1613329670883221508

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.