Grayscale Bitcoin Trust (GBTC) has won a significant legal battle against the SEC in its quest to transform its over-the-counter GBTC application into a recognized Bitcoin ETF.

The US Court of Appeals Circuit Judge Neomi Rao has directed that Grayscale request for a review should be acknowledged and that the SEC’s rejection of the GBTC listing be overturned. However, the judgment doesn’t assure Grayscale’s spot Bitcoin ETF will be listed.

Previously in June 2022, the SEC rejected Grayscale’s bid for the listing, prompting the crypto asset manager’s legal heavyweight, Donald B. Verrilli Jr.— once the US Solicitor General, to initiate a petition for review.

Notably, Grayscale is the foremost over-the-counter Bitcoin fund, boasting a market cap exceeding $14 billion. Earlier in the year, its shares traded at almost half the net asset value, a consequence of its litigation with the SEC and credit worries linked to its parent company, Digital Currency Group (DCG).

Further challenges arose in late 2022, when Grayscale ended significant contracts with its associate, the digital currency broker Genesis Global, which later froze withdrawals due to a market chaos triggered by the downfall of the FTX crypto exchange. Genesis Global’s predicament was compounded by the $1.2 billion debt from the collapsed Singaporean crypto hedge fund, Three Arrows Capital.

By January 2023, DCG’s owed amounts surged to over $3 billion, prompting considerations of a substantial $500 million venture capital portfolio sale. Simultaneously, Genesis Global was under strain, owing a whopping $900 million to Gemini’s Earn program users.

Information for this briefing was found via the sources mentioned within the article. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.