In a major victory for the cryptocurrency industry, a federal appeals court has ruled that the Securities and Exchange Commission (SEC) must reconsider its decision to reject Grayscale’s application for a spot bitcoin exchange-traded fund (ETF).
The ruling, which was handed down by the U.S. Court of Appeals for the District of Columbia Circuit, is a significant setback for the SEC and could pave the way for the approval of the first spot bitcoin ETF in the United States.
Grayscale had filed its application for a spot bitcoin ETF in October 2021. The SEC rejected the application in June 2022, citing concerns about market manipulation. Grayscale sued the SEC in July 2022, arguing that the rejection was arbitrary and capricious.
In its ruling, the appeals court agreed with Grayscale, finding that the SEC had failed to adequately explain its reasons for rejecting the application. The court also found that the SEC had not shown that a spot bitcoin ETF would be more susceptible to manipulation than other types of ETFs.
The ruling is a major victory for Grayscale and the cryptocurrency industry. It is also a setback for the SEC, which has been criticized for its slow and inconsistent approach to regulating cryptocurrencies.
The SEC is likely to appeal the ruling to the Supreme Court. However, the ruling is a positive sign for the future of spot bitcoin ETFs in the United States.
The approval of a spot bitcoin ETF would be a major milestone for the cryptocurrency industry. It would make it easier for investors to gain exposure to bitcoin and could help to legitimize the asset class.
The ruling is also a sign of the growing acceptance of cryptocurrencies by regulators. The SEC has been reluctant to approve spot bitcoin ETFs, but the appeals court’s ruling suggests that the agency is starting to come around.
The approval of a spot bitcoin ETF would be a major victory for the cryptocurrency industry and could help to usher in a new era of mainstream adoption.