U.S. Court of Appeals Rules in Favor of Grayscale in SEC Lawsuit

One sentence summary – The U.S. Court of Appeals for the D.C. Circuit has ruled in favor of Grayscale in a lawsuit against the SEC, increasing the likelihood of a bitcoin ETF being approved, as the court rejected the SEC’s basis for denying a spot bitcoin ETF and stated that the denial of Grayscale’s proposal was arbitrary and capricious due to the SEC’s inconsistent treatment of similar products, although concerns over market manipulation were not addressed, and the SEC still has options and decisions to make regarding the approval process.

At a glance

  • The U.S. Court of Appeals for the D.C. Circuit ruled in favor of Grayscale in a lawsuit against the SEC.
  • This ruling increases the likelihood of a bitcoin ETF being approved.
  • The SEC had previously denied Grayscale’s application to convert its Grayscale Bitcoin Trust to an ETF.
  • The court rejected the SEC’s basis for denying a spot bitcoin ETF, pointing out its inconsistent treatment of similar products.
  • The ruling does not address concerns over possible market manipulation, and the SEC has the option to appeal the case within 45 days.

The details

The U.S. Court of Appeals for the D.C. Circuit has ruled in favor of Grayscale in a lawsuit against the Securities and Exchange Commission (SEC).

This ruling increases the likelihood of a bitcoin exchange traded fund (ETF) being approved.

Previously, the SEC had denied Grayscale’s application to convert its Grayscale Bitcoin Trust to an ETF.

The court rejected the SEC’s basis for denying a spot bitcoin ETF.

The SEC had argued that there was a lack of a regulated crypto market to prevent manipulation.

The court pointed out that the SEC had previously approved a futures-based bitcoin product.

This suggested that if one type of product is approved, the other should be as well.

The court stated that the denial of Grayscale’s proposal was arbitrary and capricious.

This was due to the SEC’s inconsistent treatment of similar products.

However, it is important to note that the ruling does not address concerns over possible market manipulation.

The SEC has the option to appeal the case within 45 days.

However, the harsh tone of the ruling may make it more difficult to do so.

Alternatively, the SEC can choose to approve the applications for a spot bitcoin ETF.

This would allow the Grayscale fund or other applied funds to be listed.

However, the SEC could also delay the decision until the maximum time allowed by law.

This would be January 10, 2024.

Moreover, the SEC could come up with new arguments to deny the application.

This could challenge Grayscale to sue again.

While there is a possibility that the SEC could decide to kill the bitcoin futures ETF, it is unlikely.

This is considering the recent approval of leveraged bitcoin futures.

It is worth noting that the approval of a spot bitcoin ETF does not guarantee that Grayscale will be the first to be approved.

Other applicants, such as ARK, may be approved first or all at the same time.

Overall, this ruling by the U.S. Court of Appeals for the D.C. Circuit in favor of Grayscale has increased the chances of a bitcoin ETF being approved.

However, the SEC still has several options and decisions to make regarding the approval process.

These decisions will shape the future of bitcoin ETFs in the market.

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cnbc.com
– The U.S. Court of Appeals for the D.C. Circuit has ruled in favor of Grayscale in a lawsuit against the SEC.
The ruling increases the likelihood of a bitcoin exchange traded fund (ETF) being approved.
The SEC had previously denied Grayscale’s application to convert its Grayscale Bitcoin Trust to an ETF.
The court rejected the SEC’s basis for denying a spot bitcoin ETF, which was the lack of a regulated crypto market to prevent manipulation.
The court pointed out that the SEC had previously approved a futures-based bitcoin product, suggesting that if one is approved, the other should be as well.
The court stated that the denial of Grayscale’s proposal was arbitrary and capricious due to the SEC’s inconsistent treatment of similar products.
The ruling does not address concerns over possible manipulation in the market.
The SEC has the option to appeal the case within 45 days, but the harsh tone of the ruling may make it more difficult to do so.
The SEC can choose to approve the applications for a spot bitcoin ETF, allowing the Grayscale fund or other applied funds to be listed.
– Alternatively, the SEC can delay the decision until the maximum time allowed by law, which would be January 10, 2024.
The SEC could also come up with new arguments to deny the application and challenge Grayscale to sue again.
– There is a possibility that the SEC could decide to kill the bitcoin futures ETF, although it is unlikely considering the recent approval of leveraged bitcoin futures.
The approval of a spot bitcoin ETF does not guarantee that Grayscale will be the first to be approved, as other applicants, such as ARK, may be approved first or all at the same time.

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