In a significant progression, the U.S. Securities and Exchange Commission (SEC) has elected not to dispute last judicial ruling. This verdict came as a reaction to a plea from Grayscale Investments, who contested the SEC’s denial of their suggested spot bitcoin exchange-traded fund (ETF). This revelation comes from an insider close to the situation.
In the month of August, the Court of Appeals in Washington, D.C., ruled that the SEC’s disapproval of Grayscale’s bitcoin ETF suggestion was unjustified. This lawsuit has garnered significant attention in the sector, as it could potentially influence future decisions regarding bitcoin ETFs, a concept that has been under discussion for the past ten years.
By choosing to refrain from contesting, the SEC may have opened the door for a reevaluation of Grayscale’s proposal. However, a spokesperson for the company has not yet made any remarks regarding this advancement.
A spot bitcoin ETF presents investors with the chance to financially participate in the world’s most highly valued cryptocurrency, according to market cap, without the necessity of direct possession. Until now, the SEC has persistently rejected all spot bitcoin ETF submissions, including Grayscale’s, citing insufficient proof that investors can be shielded from market exploitation.
In its legal action against the SEC, Grayscale contended that the regulatory body had formerly sanctioned specific monitoring agreements to mitigate the threat of deception in ETFs founded on bitcoin futures. The firm insisted that this same framework should be applicable to its spot ETF, as both fund categories hinge on the value of bitcoin.
The appellate court agreed with Grayscale, claiming that the SEC’s disapproval of the proposal was random, as it failed to elucidate the inherent differences between the two monitoring agreements.
It’s expected that the appellate court will release a directive outlining the execution of its judgement, which will likely encompass guidance for the SEC to reevaluate Grayscale’s proposition.
Other prominent wealth management corporations, such as BlackRock, Fidelity, and Invesco, have also submitted comparable submissions for spot bitcoin ETFs to the SEC. The regulatory agency is projected to announce its verdicts on these submissions no later than the end of the following year.
The SEC’s press office has not yet made any remarks regarding this situation.
This advancement signifies a notable stride towards the endorsement of bitcoin ETFs, and the industry will be closely watching as the SEC explores this new terrain.