August 30, 2023 at 12:15 AM GST 1 min read News
  • Federal appeals court overturns SEC’s denial of Grayscale’s application to convert its Bitcoin Trust to an ETF.
  • The court’s decision highlights inconsistencies in the SEC’s treatment of bitcoin-related financial products.
  • Grayscale’s victory is seen as a monumental step forward for American investors and the broader bitcoin ecosystem.

In a groundbreaking decision, a federal appeals court ruled on Tuesday that Grayscale Investments could proceed with its application to convert its Bitcoin Trust into a spot bitcoin ETF. 

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The court found that the SEC had failed to provide a coherent explanation for its inconsistent treatment of bitcoin-related financial products. Donald B. Verrilli Jr., who represented Grayscale, argued that the SEC’s denial contradicted its own previous approvals of bitcoin futures exchange-traded products.

The SEC had initially disapproved a proposed rule change filed by NYSE Arca to list and trade shares of the trust. Grayscale immediately filed a petition for review, leading to this landmark victory. An SEC spokesman stated that they are “reviewing the court’s decision to determine next steps.”

This ruling not only vindicates Grayscale but also opens doors for the broader adoption of Bitcoin ETFs. It sets a precedent that could encourage other financial institutions to pursue similar offerings, thereby expanding investment opportunities in the crypto space.

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