Grayscale, the firm behind the world’s largest Bitcoin Trust, is considering a share buyback option if its plans to convert its flagship fund into an ETF are unsuccessful.

In a year-end letter to investors, Grayscale CEO Michael Sonnenshein said the firm is exploring options to return a portion of the Grayscale Bitcoin Trust’s (GBTC) capital in the event that a GBTC ETF does not materialize.

One of these options includes a tender offer for investors to buyback 20% of GBTC’s outstanding shares. In order to go ahead with this, Grayscale would need shareholder approval, and perhaps more importantly, the U.S. Securities and Exchange Commission to lift “certain requirements” that are currently applicable to tender offers.

“The SEC may not provide this relief, in which case GBTC would not be able to pursue such a tender offer,” said Sonnenshein.

If the tender offer is successful, GBTC would continue operating without offering a redemption program until it is successful in converting it into a spot Bitcoin ETF, he said. 

Grayscale is in the midst of an ongoing lawsuit with the SEC, which it filed on June 29 after the latter rejected its application to convert GBTC into an ETF. In its complaint, Grayscale alleged the SEC’s logic for denying the conversion to a spot Bitcoin ETF was “arbitrary, discriminatory, and in excess of statutory authority.”

While the SEC has approved Bitcoin futures ETFs from ProShares and Valkyrie, it has rejected several spot Bitcoin ETF applications received over the years.

In a response filed on Dec. 12, the SEC argued that it approved Bitcoin futures ETFs and not spot ETFs based on the fact that the futures investment products trade on the highly regulated Chicago Mercantile Exchange, while spot Bitcoin trades on unregulated markets without “adequate surveillance.”

A verdict for Grayscale’s legal challenge could soon be in sight, with final written briefs due on Feb. 3, after which a three judge panel will hear oral arguments and make a ruling.  

GBTC shares are currently trading at a 48% discount to Net Asset Value.