"Grayscale Investments" (Grayscale Investments) has been working on transforming its Bitcoin trust fund GBTC into a "Bitcoin Spot ETF" in the past, but has been repeatedly rejected by the US Securities and Exchange Commission (SEC). For this reason, Huiduxin filed a lawsuit against the court, and finally won the victory milestone on August 29, paving the way for the launch of the Bitcoin spot ETF.
The U.S. Federal Court of Appeals ruled on August 29 that the decision of “SEC’s choice to reject Grayscale’s investment application proposal” was extremely inappropriate, and thus approved Grayscale’s review request. This means that the US SEC must now re-examine the application of "Greyscale Investments Converting GBTC into Bitcoin Spot ETF ".
As soon as the news was exposed, Bitcoin immediately soared yesterday (29th) evening, once breaking through the $ 28,000 mark, an increase of more than 7% within the day, but it has fallen back to $27,509 at the time of writing.
Ji Kim, general counsel and head of global policy at the Cryptocurrency Innovation Council, said:
The price of bitcoin surged immediately after the ruling, underscoring market expectations and the far-reaching implications of the decision. Bitcoin spot ETFs are now within reach, and we have witnessed investor confidence in the cryptocurrency space in court rulings.
What did the judge say?
Circuit Judge Neomi Rao said in writing the opinion of the DC Circuit Court of Appeals that among thousands of public comments, almost all comments were in favor of converting GBTC to ETF, but even so, the SEC insisted on rejecting the application of Grayscale Investment.
The circuit judge held that the US SEC's rejection of Grayscale's investment proposal was "arbitrary" and "capricious" because the agency could not fully explain "why it decided to approve the listing of two bitcoin futures ETPs, but rejected Grayscale's investment proposal." Bitcoin ETP".
Neomi Rao pointed out that in the absence of a coherent explanation, the US SEC's regulatory approach of "discriminatory treatment of similar products" violates the principle of equality. Therefore, Grayscale's review request was approved and the US SEC's order was revoked.
The circuit judge added:
In requesting the review board's denial order, Grayscale insisted that its proposed bitcoin ETP product is substantially similar to a bitcoin futures ETP product and should be allowed to trade on NYSE Arca. we agree.
Why did the US SEC repeatedly reject the "Bitcoin Spot ETF" application?
The SEC has yet to approve a spot-based bitcoin ETF, and has repeatedly rejected such applications since the Winklevoss twins applied for a similar bitcoin ETF in 2013. However, bitcoin ETFs based on futures contracts can already be traded in the United States.
Recommended reading: Another "Bitcoin Futures ETF" in the United States has been approved! "Bitcoin spot ETF" is not far away?
The reason why the SEC has repeatedly rejected bitcoin spot ETF applications is that it has a responsibility to protect US investors. When Grayscale's application was rejected last year, the SEC said that Grayscale's application did not provide investors with sufficient protection from fraudulent and manipulative tactics.
"Bitcoin spot ETF" is really just around the corner?
Although the Bitcoin spot ETF has now won a big victory in court, it does not mean that the battle is over, because the decision of "approval or disapproval" is still in the hands of the US SEC.
Dan Berkovitz, who used to be the general counsel of the SEC, commented: "If the SEC wants to reject the Bitcoin ETF invested by Grayscale again, they will have to give some other reasons that have not been clarified before, and this will be for them. an obstacle."
Daughtery, a professor at Cornell University School of Law, also said: "After losing this case, the SEC would be wise to quickly approve Grayscale's investment application. Will Chairman Gary Gensler back down and change course? Perhaps some Democrats on Capitol Hill will persuade he."
Jake Chervinsky, chief policy officer of the cryptocurrency lobby group "Blockchain Association", pointed out that the SEC may next come up with a different reason to reject Grayscale's investment proposal and force a longer and more costly lawsuit.
