SEC to Reevaluate Grayscale's Bitcoin ETF Proposal
The U.S. Securities and Exchange Commission (SEC) has chosen not to challenge a recent court ruling from the District of Columbia Court of Appeals. This August ruling indicated that the SEC's denial of Grayscale Investments' bid for a spot bitcoin exchange-traded fund (ETF) was unjust.
The case has been under the spotlight, as the industry has been striving for years to launch such products. The SEC’s refraining from an appeal likely signals a forthcoming review of Grayscale's proposal.
A spot bitcoin ETF would offer investors a chance to tap into the value of the world's top cryptocurrency without direct ownership. Historically, the SEC has turned down all spot bitcoin ETF proposals, including Grayscale’s, claiming that the applicants haven’t demonstrated adequate safeguards against potential market manipulations.
Grayscale countered this rejection, pointing out that the SEC had already sanctioned surveillance measures to counteract deceit in bitcoin futures-based ETFs. They contended that these measures should suffice for their spot ETF, given that both types of funds depend on bitcoin's price metrics.
The appeals court emphasized the SEC's failure to clarify the distinct differences between the two ETF types as a reason for their decision.
Following the court's decision, directives are expected, likely urging the SEC to reconsider Grayscale's proposal.
Notably, other major asset managers, such as BlackRock, Fidelity, and Invesco, also have spot bitcoin ETF applications pending with the SEC. Decisions on these are anticipated by next year at the latest.
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