In recent developments, the United States Court of Appeals for the D.C. Circuit has ordered the Securities and Exchange Commission (SEC) to reevaluate Grayscale Investments’ application to convert its bitcoin trust into a spot exchange-traded fund (ETF). The court ruled that the SEC‘s initial denial was “arbitrary and capricious,” marking a significant victory for Grayscale in its legal battle against the regulator.
The lawsuit followed the SEC’s consistent rejection of spot bitcoin ETF applications, citing market manipulation concerns. This practice has continued under current SEC Chairman Gary Gensler, sparking debate over his past and current views on bitcoin products.
Gensler’s criticism of the SEC’s inconsistent approach to bitcoin ETFs and futures, voiced during a fireside chat at the 2019 MIT Bitcoin Expo, recently resurfaced on social media platforms.
The court ruling recognized similarities between Grayscale’s proposal and previously approved bitcoin futures ETFs. This could set a precedent for other firms seeking approval for similar products.
