Major victory for the crypto industry as Grayscale's appeal against the SEC was granted.
A federal appeals court ruled in favor of Grayscale Investments, a crypto asset manager, granting a major victory against the United States Securities and Exchange Commission (SEC) over Bitcoin ETF rejection.
On August 29th, Judge Neomi Rao ordered Grayscale’s petition for review to be granted, and the SEC had to vacate its order to reject the application.
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According to the ruling, the SEC failed to sufficiently show how Grayscale’s application differed from others that the agency approved. The judge stated:
The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP.
Grayscale conveyed that “this is a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper.”
In 2021, Grayscale submitted an application to convert its Bitcoin Trust (GBTC) to a BTC exchange-traded fund (ETF). However, the SEC shot it down, citing inherent security issues.
In turn, Grayscale appealed the decision, basing its argument on the fact that the SEC continues to approve other ETFs.
Of course, this is not the end of the legal battle. The order didn’t guarantee that Grayscale would receive its license. The SEC will now have to properly review the application and, if needed, will need to provide clearer reasoning for possible rejection.
According to the message on X (formerly Twitter), the CEO of Grayscale assured that the “legal team is actively reviewing the Court's opinion”.
In addition to seeking its own victory against the SEC’s decision, Grayscale also advocated for a broader approval of all pending Bitcoin ETF Proposals, arguing it would only promote fair competition.
