SEC Chairman Did Not Comment on Grayscale’s Spot Bitcoin ETF: SEC May Not Appeal the Decision!

• The SEC has until midnight to file an appeal of the August decision directing the regulator to re-examine Grayscale’s offering of a spot fund.
• If the SEC does not object by midnight, the court will proceed to issue an order in the coming days on how the decision should be carried out.
• Grayscale first filed the lawsuit against the SEC last year after its proposal to convert its flagship fund GBTC into a spot Bitcoin ETF was rejected last year.

The U.S. Securities and Exchange Commission has until midnight; SEC Chairman declined to comment on the issue!

Gensler Hasn’t Commented on Bitcoin ETF

Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission, declined to comment when asked about a possible appeal on a high-profile decision regarding Grayscale Investments’ attempt to convert its flagship fund into a spot Bitcoin ETF. He did not address questions from reporters during a press conference on Friday.

The SEC has until midnight to file an appeal regarding the August decision that directed the regulator to re-examine Grayscale’s proposal for a spot fund. This decision has particularly focused on the SEC treating similar funds based on futures contracts and spot Bitcoin ETFs differently, with regulatory approval for the latter. The asset management company filed a lawsuit against the agency after its proposal for converting the GBTC fund was denied last year.

If the SEC doesn’t appeal by midnight, the court will continue to provide instructions on how to carry out the decision, which, according to an August blog post from the law firm Winston & Strawn LLP, may involve the SEC approving Grayscale’s application or requesting a re-examination of the application.

However, if the SEC appeals before midnight, it could potentially lead the court to convene an “en banc” hearing, involving all the judges, along with the three judges from the initial decision.

High-Profile Decision

Grayscale first filed the lawsuit against the SEC last year after its proposal to transform its flagship GBTC fund into a spot Bitcoin ETF was rejected. Don Verrilli, Grayscale’s lead attorney, said in oral arguments in March that the SEC contradicted itself by allowing futures ETFs while not permitting a spot Bitcoin ETF. Last month, Grayscale sent a letter to the SEC requesting a meeting to discuss converting the Grayscale Bitcoin Trust into a spot Bitcoin ETF. Grayscale’s attorneys stated:

“We hope the best use of resources right now is for the Commission to issue an order approving the NYSE Arca’s Rule 19b-4 filing and allow regulators to conclude their work with Grayscale and NYSE Arca for the quick listing of Trust shares.”

The SEC has not approved a spot Bitcoin ETF so far, but Grayscale’s decision has been viewed positively for a number of companies that have applied in the last few months, including major names like BlackRock and Fidelity, seeking approval for spot Bitcoin ETFs.