Grayscale Urges SEC To Quickly Approve Its Spot Bitcoin ETF

Key Points:

• Grayscale seeks quick SEC approval for its Bitcoin ETF following a legal victory.
• A court ruling questions the SEC’s inconsistent treatment of crypto ETFs.
• The SEC’s decision could impact the future of cryptocurrency ETFs.

Grayscale Investments has wasted no time in pressing the U.S. Securities and Exchange Commission (SEC) to approve its proposed exchange-traded fund (ETF) tracking Bitcoin. This comes on the heels of a recent legal win against the SEC.

In a significant ruling, a panel of judges in the District of Columbia Court of Appeals determined that the SEC was unjust in rejecting Grayscale’s Bitcoin ETF application without providing sufficient reasoning.

Grayscale’s legal team promptly reached out to the SEC, urging a meeting to discuss the way forward. They asserted that there were no valid grounds for the regulator to persist in blocking the conversion of the Grayscale Bitcoin Trust (GBTC) into an ETF. Joseph Hall, an attorney from Davis Polk, argued:

“Each day that passes without listing the Trust’s shares on NYSE Arca is another day when the Trust’s existing investors bear unjustified harm.”

The recent court ruling criticized the SEC’s inconsistent treatment of spot Bitcoin ETFs and their futures-based counterparts, which have received approval. Grayscale’s lawyers insisted that the SEC should recognize the absence of justifiable reasons for distinguishing their trust from Bitcoin futures ETFs.

While the SEC has until mid-October to appeal to a wider panel of judges or the Supreme Court, analysts suggest that such an appeal may face challenges given the Supreme Court’s previous skepticism toward regulatory actions.

Grayscale remains hopeful that the SEC will expedite the approval process, emphasizing the importance of a level playing field for its nearly one million investors.

This development marks a pivotal moment in the ongoing debate over cryptocurrency ETFs, potentially paving the way for broader acceptance and adoption in the financial markets.

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