Craig Salm, chief legal officer at asset manager Grayscale, discussed the firm’s lawsuit with the United States Securities and Exchanges Commission (SEC) regarding the conversion of the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
Salm explained the basis for Grayscale’s argument against the SEC while answering the most-asked questions regarding the lawsuit. According to the legal officer, the SEC’s denial of the spot Bitcoin ETF separates futures and spot trading for Bitcoin ETFs and draws a distinction between the two.
However, Grayscale argues that the differences have no correlation with Bitcoin ETF approvals, as both futures and spot Bitcoin ETF prices are based on the same spot Bitcoin markets.
Thus, the Grayscale legal team believes that the disapproval of spot Bitcoin ETFs amid the approval of Bitcoin futures ETFs can be considered “unfair discrimination.” Salm claimed that this violates several laws including the Administrative Procedure Act and the Securities Exchange Act of 1934.
After explaining Grayscale’s arguments, Salm also answered the most common question among those following the lawsuit’s developments: When will a spot Bitcoin ETF finally be approved?
According to Salm, while there is no certainty about the exact timing — due to many factors — he estimates that it could take from one to two years.
Despite the potential length of the lawsuit, Salm said that Grayscale firmly believes in its arguments and is positive that the courts will rule in its favor.
When Grayscale launched its legal challenge to the SEC, community members rallied behind the firm. Many were disappointed with the decision to disapprove the spot Bitcoin ETF while approving an ETF that shorts Bitcoin. A Twitter user alleged that the SEC’s move aims to “suppress the price of Bitcoin.”