Key Insights
- Grayscale wins lawsuit against SEC as the District of Columbia Court of Appeals directs the regulator to reconsider converting the GBTC into a spot bitcoin ETF.
- The court decision overturns a previous SEC ruling and mandates the reconsideration of the proposed rule change for the Grayscale Bitcoin Trust.
- Bitcoin’s price experiences a significant surge above $28,000 following the court’s decision in favor of Grayscale.
The District of Columbia Court of Appeals has delivered a long-awaited verdict in Grayscale Investments’ litigation with the U.S. Securities and Exchange Commission (SEC) to convert the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF.
The Court decided to grant the motion for review and set aside the Commission’s decision. This means that the SEC wrongfully rejected the application to create a spot bitcoin ETF and should reconsider it.
Recall that in July 2022, the Commission rejected a proposal that would allow NYSE Arca to be listed on the Grayscale Bitcoin Trust. The commission said NYSE Arca did not have a proper agreement to jointly oversee BTC trading , but approved several bitcoin futures ETFs.
Grayscale, for its part, argued that the oversight arrangements for bitcoin futures ETFs should also meet the requirements for a spot ETF, since both products are based on the underlying price of the asset.
The court’s decision overturns a previous ruling by the Securities and Exchange Commission. The SEC must now reconsider the proposed rule change for the Grayscale Bitcoin Trust and can no longer require a joint oversight agreement as it used to.
The Commission was unable to adequately explain why it approved the listing of two futures ETFs but rejected Grayscale’s application for a spot ETF,” the court said in a statement. “In the absence of a clear explanation, such a different attitude of the regulator towards similar products is illegal.”
Representatives of Grayscale welcomed this decision, saying that it is an important event for investors.
This is a huge step forward for US investors and the bitcoin ecosystem. The Grayscale team and our legal advisors are actively investigating the details of the court’s opinion and will be discussing next steps with the SEC,” they wrote.
Bitcoin surges as Grayscale wins lawsuit against SEC
Immediately after the announcement of the court decision, the price of bitcoin soared above $28,000. Other flagship digital assets from the top 10 also showed a positive trend.
The outcome of this legal battle holds significance not only for Grayscale but also for the broader cryptocurrency sector and the regulatory framework governing digital assets. Grayscale’s successful outcome could potentially establish a precedent, encouraging other enterprises aiming to introduce Bitcoin ETFs, thereby challenging the SEC’s rulings on similar issues.
As the word spreads about Grayscale’s triumph, the cryptocurrency market is poised to respond, with investors and traders attentively observing the implications on Grayscale’s Bitcoin trust. The outcome is likely to influence the general sentiment toward Bitcoin and other digital assets.
[…] August 29, asset manager Grayscale achieved a legal victory against the SEC after filing an appeal ordering it to reconsider its application to convert the GBTC trust into a […]