Grayscale victory big boost for decade-long spot bitcoin ETF push
Grayscale Investments is a big boost for the cryptocurrency industry's decade-long effort to launch an exchange-traded fund that tracks bitcoin, even if it does not immediately open the floodgates for such products.
A three-judge panel of the District of Columbia Court of Appeals in Washington on Tuesday ruled that the Securities and Exchange Commission was wrong to reject Grayscale's proposed bitcoin ETF without explaining its reasoning, in a case that has been closely watched by the industry.
The ruling requires the SEC to review Grayscale's application, meaning there is no certainty it will reach a different conclusion and greenlight the product. And the regulatory agency, which on Tuesday said it was studying the ruling, could appeal.
Still, it endorses the rights of the cryptocurrency industry — which is reeling from a massive SEC crackdown — to due process, and offers more clarity on how it can meet the SEC's investor protection bar, said executives and lawyers.
It's the second major industry victory after a federal judge in New York ruled in July that Ripple Labs did not violate the law by selling its token on exchanges. The SEC will appeal that case, which is on shaky ground after a subsequent ruling questioned its approach.
«This decision represents another instance of U.S.
courts pushing back against what is widely seen as regulatory overreach by the SEC in the digital asset space,» said Christopher LaVigne, co-chair of the cryptocurrency practice at the Withers law firm. The SEC declined to comment on Wednesday.
Bitcoin jumped around 7% on Tuesday, although it pared some gains Wednesday. It was last at $27, 206.
A spot bitcoin ETF would give investors exposure to the world's largest cryptocurrency by market
