Grayscale Investments is forging ahead in its plan to transform itself into a major ETF player even as the firm’s potential flagship fund remains blocked by regulators. The crypto-focused asset manager announced on Tuesday that it has created the Grayscale Funds Trust to manage some publicly traded products, including ETFs, under its own roof as part of the rules of the 1940 Investment Companies Act. Grayscale also filed to create three new ETFs under the banner of the trust. “The formation of the Grayscale Funds Trust represents yet another important milestone and one of those really important foundational elements that the firm needs in order to continue to bring products to market,” Grayscale CEO Michael Sonnenshein told CNBC. The expansion comes as Grayscale is embroiled in a lawsuit with the Securities and Exchange Commission over the company’s attempt to convert its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF. The SEC has repeatedly declined to approve spot bitcoin products, citing concerns about manipulation in the underlying crypto market. Grayscale has argued that the product should be allowed to launch in part because there are already bitcoin futures ETFs on the market. The lawsuit is key to Grayscale’s future because GBTC has been trading at a large discount for months, putting pressure on the firm to allow redemptions. If the trust is converted into an ETF, the discount could be closed without significant withdrawals from the fund. The case was heard by the DC Circuit Court of Appeals in March and a decision is expected later this year. Sonnenshein said that while the shift into ETFs is part of the broader corporate plan for Grayscale, the lawsuit and the creation of the new ETF trust are “separate and distinct” issues. Grayscale does ultimately plan on converting all of its digital asset trusts into U.S.-listed ETFs, he added. One of the new ETFs that Grayscale filed for on Tuesday could be seen as something of a substitute for a spot bitcoin fund. The Grayscale Global Bitcoin Composite ETF, which would have the ticker “BTC” upon launch, would invest in spot bitcoin products outside the U.S. as well as the equities of bitcoin mining companies. The other prospective funds are the Grayscale Ethereum Futures ETF (ETHG) and the Grayscale Privacy ETF (PRVC). The initial filings do not yet list expense ratios for the fund. Registration for new ETFs are typically not effective until at least 75 days after their initial filings, and some funds may never launch. Grayscale already has one ETF in the U.S. market through US Bank’s series trust. The Grayscale Future of Finance (GFOF) launched last year and has only about $5 million in assets under management. Sonnenshein said Grayscale having its own trust will allow it more autonomy than working with a third party. After a brutal sell-off for crypto in 2022, the price of bitcoin and other digital currencies has rebounded in 2023. Bitcoin was trading near $27,500 on Tuesday, up more than 60% for the year but still down about $40,000 from its all time high.