Court Rules SEC Wrong to Reject Grayscale’s Bitcoin ETF Application
A federal appeals court ruled on Tuesday that the US Securities and Exchange Commission was wrong to reject Grayscale Investments’ proposal to form a spot bitcoin exchange-traded fund, paving the way for the first product of its sort, a report by Forbes has found.
The Securities and Exchange Commission (SEC) failed to thoroughly explain its reasoning when denying Grayscale’s product, according to a three-judge panel of the District of Columbia Court of Appeals in Washington, and its judgement should be reviewed.
Following the news, the price of bitcoin, the world’s largest cryptocurrency, increased by more than 6% to $27,858 (approximately Rs. 23,04,400).
A spot bitcoin ETF would monitor its underlying market price, providing investors with exposure to the digital commodity without the need to purchase it. The SEC has rejected all proposed bitcoin ETFs, including Grayscale’s, claiming that they do not fulfil the SEC’s standard for preventing market manipulation.
While the decision does not automatically approve Grayscale’s ETF, it is a significant step forward in the industry’s decade-long endeavour to develop a Bitcoin ETF product.
The court judgement is a “historic milestone for American investors,” according to Grayscale CEO Michael Sonnenshein.
According to a Grayscale spokesperson, the business is analysing the details and will take “next steps with the SEC.”
The SEC has 45 days to file an appeal. A representative for the agency stated that it was examining the court’s judgement to decide the next measures.
The Bitcoin industry was quick to applaud the decision. Several other asset managers, including BlackRock, Fidelity, and Invesco, have comparable SEC filings for a spot bitcoin ETF pending.
“This ruling isn’t just about Grayscale or Bitcoin; it establishes a precedent for the entire crypto industry,” Ji Kim, general counsel and head of global policy at the Crypto Council for Innovation, stated.
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