- A spot Bitcoin ETF might soon be coming to the U.S.
- A federal court sided with Grayscale in its appeal against the SEC.
- The decision is seen as a monumental win for other asset managers.
A federal court of appeal has ordered the U.S. Securities and Exchange Commission (SEC) to vacate its decision to reject Grayscale’s spot Bitcoin ETF bid on the grounds of market manipulation concerns.
Grayscale Investment, the world’s biggest crypto fund manager, filed an appeal against the SEC in June 2022 after the commission turned down its application to convert its over-the-counter Grayscale Bitcoin Trust (BTC) (OTCQX: GBTC) to a spot Bitcoin ETF.
SEC Ordered to Review Application
During the appeal, Grayscale maintained that its spot Bitcoin ETF application was materially similar to the Teucrium and Valkyrie Bitcoin funds, which have since been approved by the SEC to trade on national exchanges.
In the landmark ruling, Circuit Judge Neomi Rao took a jab at the regulator, noting that Grayscale has a right to the same regulatory treatment that other funds received.
“The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP. In the absence of a coherent explanation, this, unlike regulatory treatment of like products is unlawful. We therefore grant Grayscale’s petition for review and vacate the Commission’s order,” the ruling read.
A Monumental Win
The news has been welcomed by the Grayscale team, with the CEO taking to Twitter to appreciate everyone who stood by the firm during the year-long appeal.
“Thank you to everyone who has been on this journey with us, especially our investors. We are grateful for your support and encouragement. Next up: our legal team is actively reviewing the Court’s opinion,” read the CEO’s post.
Grayscale’s win at the appellate court is seen as a monumental moment for several other asset managers whose spot Bitcoin ETF applications are pending, including the world’s largest asset manager, BlackRock, Fidelity, Bitwise, VanEck, WisdomTree, and Invesco.
Read how Ripple Labs won a case against the SEC:
Here is the reason why the SEC is hesitant to approve a spot Bitcoin ETF: