The legal conflict between Grayscale and the SEC has concluded with the D.C. Circuit Court of Appeals issuing a final ruling. This ruling forces the U.S. regulator to reverse its denial of Grayscale’s spot bitcoin ETF application. Notably, the court had criticized the SEC’s rejection of converting the AUM’s substantial $17 billion Grayscale Bitcoin Trust [GBTC] into an ETF as “arbitrary and capricious.” Interestingly, the securities watchdog opted not to challenge the court’s decision, as reported by TronWeekly.
The recent conclusion of the case on October 23 essentially cemented the previous verdict, shifting the attention back to the SEC. Now, the SEC has the authority to either approve Grayscale’s application or potentially decline it based on different grounds. The regulator’s decision not to contest the ruling elicited responses from experts in the market.
ETF analyst James Seyffart from Bloomberg viewed the SEC’s move as a significant advancement in the approval process for crypto-based ETFs. Similarly, other industry experts such as Michaël van de Poppe and Crypto Rover shared this perspective, indicating that the SEC’s decision not to challenge Grayscale’s victory suggests a positive outlook for the cryptocurrency market. Poppe observed the development of an institutional framework for cryptocurrency investments, while Crypto Rover pointed out that the SEC might lack a basis to reject Bitcoin Spot ETFs.
Grayscale: “Ready To Work With SEC”
It is important to note that the regulatory body is simultaneously evaluating multiple other spot bitcoin ETF applications, some of which are submitted by major industry heavyweights such as BlackRock, Fidelity, Franklin Templeton, or Cathie-Wood-led Ark Invest.
Following the recent court ruling, Grayscale’s spokesperson, Jennifer Rosenthal, expressed their eagerness to collaborate further with the SEC to facilitate the conversion of GBTC into an ETF. Rosenthal stated in a statement made on October 23 that the Grayscale team is looking forward to continuing their constructive work with the SEC. She emphasized that GBTC is fully prepared operationally, and the team aims to move forward with the process as swiftly as possible, all for the benefit of their investors.