- The U.S. D.C. Circuit Court has issued an order for the Securities and Exchange Commission (SEC) to reconsider Grayscale Investments’ spot Bitcoin ETF application.
- The court’s official directive was an expected move as a result of the SEC not opposing the decision due to the August decision.
- Grayscale is not the only player in this matter. Other major industry giants like BlackRock and Fidelity have also moved to request approval from the SEC for their Bitcoin ETFs.
US D.C. Circuit Court orders SEC to reexamine Grayscale spot Bitcoin ETF application: What will the SEC do now?
SEC Revisiting the Spot Bitcoin ETF
The U.S. D.C. Circuit Court has issued an order for the Securities and Exchange Commission (SEC) to reconsider Grayscale Investments’ spot Bitcoin ETF application. This decision comes after the court previously based its decision on Grayscale’s proposal, emphasizing similarities with already approved Bitcoin futures ETFs. Therefore, the court stated that Grayscale’s product deserved approval, noting that it is similar in capacity to detect market manipulation.
The court’s official directive was an expected move as the SEC did not oppose the decision in August. Additionally, this development accelerated Grayscale’s move to revise its filing, hoping to convert its flagship GBTC fund into a fully-fledged ETF.
The order reinforces the argument that Grayscale’s proposed Bitcoin ETF should not face unwarranted challenges by highlighting that it reflects the characteristics of approved Bitcoin futures ETFs. Significantly, the company submitted its application through an expedited S-3 process, deviating from the standard S-1 process for new share offerings. Grayscale also plans to list its shares on NYSE Arca in addition to its existing applications.
However, despite the court’s push, the SEC’s subsequent steps remain uncertain. This regulatory body, known for its meticulous reviews, retains the authority to find new reasons for rejection, encouraging market participants to remain cautious.
Major Companies Awaiting SEC Approval
Grayscale is not the only player in this matter. Other major industry giants, such as BlackRock and Fidelity, have also taken steps to request approval for their Bitcoin ETFs from the SEC. SEC Chairman Gary Gensler stated that they have received many applications without making specific comments. He detailed that the proposals go through a rigorous review process similar to the oversight of a public offering and emphasized the agency’s commitment to fundamental assessment.
The increase in these applications indicates a growing appetite for such financial products. However, it also requires the SEC to navigate a complex application landscape to balance consumer protection with market innovation.
