Grayscale's Court Victory Sparks Push for Speedy SEC ETF Approval

<p>Grayscale
Investments is urging the U.S. Securities and Exchange Commission (SEC) to
promptly approve its proposed <a href="https://www.financemagnates.com/terms/e/exchange-traded-fund-etf/">exchange-traded fund (ETF</a>) that would track
bitcoin. This call for approval follows a recent legal victory for Grayscale
against the SEC.</p><p>Legal Victory Spurs Grayscale's
Push for SEC Approval of Bitcoin ETF</p><p>In
the legal case, a three-judge panel of the District of Columbia Court of
Appeals ruled that the SEC had made a mistake in rejecting Grayscale's proposed
<a href="https://www.financemagnates.com/terms/b/bitcoin/">bitcoin</a> ETF without providing a clear explanation for its decision. This ruling
prompted Grayscale to push for the SEC to review and approve its ETF
application.</p><p>"We
hope you will agree that the best use of resources now is for the (SEC) to
issue an order approving" the product, Grayscale's law firm DavisPolk
wrote in a letter which was filed with the SEC on Tuesday.</p><p>A
spot bitcoin ETF would allow investors to gain exposure to bitcoin's price
movements without actually owning the cryptocurrency. The SEC has previously
denied all spot bitcoin ETF applications, citing concerns about the protection
of investors from potential market manipulation.</p><p>However,
Grayscale argued that the same market surveillance arrangement used for
approved bitcoin futures ETFs should be sufficient for its spot ETF since both
products rely on bitcoin's underlying price. The appeals court supported
Grayscale's argument by ruling that the SEC's denial of <a href="https://www.financemagnates.com/tag/grayscale/" target="_blank" rel="follow">Grayscale's</a> application
was arbitrary, as it failed to explain why the two arrangements were materially
different.</p><p>SEC's Historical Rejections and
Renewed Industry Hope</p><p><a href="https://www.financemagnates.com/cryptocurrency/is-the-first-spot-btc-etf-coming-grayscale-triumphs-over-sec-in-court/" target="_blank" rel="nofollow">Finance Magnates</a> reported earlier that the
possibility of the United States getting its first spot Bitcoin (BTC)
exchange-traded fund (ETF) has been a topic of interest in the crypto industry.
In recent years, various companies have applied for a spot BTC ETF with the
SEC, but all applications have been rejected due to concerns about fraud and market
manipulation.</p><p>However,
there has been renewed hope in the crypto industry that such an ETF might gain
approval. In June, BlackRock, the world's largest asset manager, submitted an
application for a BTC ETF, which subsequently led to other companies in the
sector submitting similar proposals.</p><p>The
recent order from the appellate court has raised the prospect of a spot BTC ETF
becoming a reality in the United States. Still, it's crucial to note that this
order simply instructs the <a href="https://www.financemagnates.com/tag/sec/" target="_blank" rel="follow">SEC</a> to review its decision regarding Grayscale's ETF
proposal. There remains a possibility that the SEC could find other grounds for
rejecting Grayscale's application, so the outcome is not guaranteed at this
point. The industry will continue to watch closely for developments in the
SEC's review process.</p><p>"If any other reason could
be offered in attempting to differentiate" the two types of products
"we are confident that it would have surfaced by now," DavisPolk
wrote.</p>

This article was written by Tareq Sikder at www.financemagnates.com.