Crypto asset manager Grayscale Bitcoin Trust (GBTC) has scored a major victory against the United States Securities and Exchange Commission (SEC) in its efforts to convert its over-the-counter GBTC application into a listed Bitcoin ETF.

According to August 29 court filings, U.S. Court of Appeals Circuit Judge Neomi Rao ordered Grayscale’s petition for review be granted and the SEC’s order to deny the GBTC listing application to be vacated. Previously, Judge Rao said that the SEC did not “offer any explanation” as to why Grayscale was in the wrong. However, the order does not guarantee the eventual listing of a Grayscale spot Bitcoin ETF. 

Michael Sonnenshein, CEO of Grayscale investments, said on Twitter that its legal team is “actively reviewing” the court opinion. 

On June 29, 2022, the SEC denied Grayscale’s application to convert GBTC into a spot ETF. The next day, Grayscale’s senior legal strategist, former U.S. Solicitor General Donald B. Verrilli Jr., filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit. At the time, Michael Sonnenshein, CEO of Grayscale, said in a statement the firm was “deeply disappointed” and “vehemently disagreed” with the SEC’s decision to deny their application.

Related: SEC delays set deadlines for Bitcoin ETF approval to early 2024

Grayscale is the largest over-the-counter traded Bitcoin fund, with over $14 billion in assets under management. Earlier this year, shares of GBTC traded at nearly 50% discount to the net asset value due to the firm’s then ongoing litigation with the SEC and credit concerns regarding its parent Digital Currency Group (DCG). 

In October 2022, Grayscale terminated material agreements with its partner and digital currency broker Genesis Global. On Nov. 16, 2022, Genesis Global paused withdrawals, citing unprecedented market turmoil amid the collapse of cryptocurrency exchange FTX. The firm was also impacted by the collapse of Singaporean crypto hedge fund Three Arrows Capital, with $1.2 billion debt owed to Genesis still unpaid.

In January 2023, it was disclosed that DCG owes creditors over $3 billion and is considering a $500 million venture capital portfolio sale. Genesis Global owes $900 million alone to users of cryptocurrency exchange Gemini’s Earn program. 

Related: SEC accepts BlackRock’s Bitcoin ETF application, signaling regulatory review