Grayscale Wins Legal Battle for Bitcoin ETF
Good news for crypto asset manager Grayscale Investments! The U.S. Court of Appeals Circuit Judge Neomi Rao has granted Grayscale’s petition for review and vacated the SEC’s order to deny the listing application for its Grayscale Bitcoin Trust (GBTC). This victory brings Grayscale one step closer to converting GBTC into a listed Bitcoin exchange-traded fund (ETF).
However, it’s important to note that the court’s decision has its limits. While the crypto community initially celebrated the win, some experts caution against excessive optimism. Gabriel Shapiro, general counsel at Delphi Labs, warns that the SEC may continue to challenge the ruling. Austin Campbell, managing partner at Zero Knowledge Consulting, also highlights the financial burden and potential repercussions of fighting back against the SEC.
Meanwhile, the SEC has postponed its decisions on several spot Bitcoin ETF applications. The regulator has extended its review period for applications from WisdomTree, VanEck, Invesco Galaxy, Bitwise, Valkyrie, and Fidelity’s Wise Origin Bitcoin Trust. The SEC now has until October to approve, deny, or further delay a decision on these investment vehicles.
UK Implements Travel Rule for Crypto
The United Kingdom has recently introduced the Travel Rule for crypto asset businesses. This rule allows these businesses to withhold certain crypto transfers to comply with regulatory requirements. If an inbound payment is received from an overseas jurisdiction that hasn’t implemented the Travel Rule, the virtual asset service provider must conduct a risk assessment before making the crypto assets available to the beneficiary. The same rule applies to outbound payments from the UK.
SEC Files Securities Claim Against NFT Offering
The SEC has accused Impact Theory, a media and entertainment company based in Los Angeles, of selling unregistered securities through its nonfungible tokens (NFTs). The company allegedly raised nearly $30 million by offering NFTs called Founder’s Keys. The SEC claims that Impact Theory portrayed the purchase of Founder’s Keys as an investment into the business. This case marks the first claim of unregistered securities sales related to NFTs in the United States.
Chinese Court Recognizes Crypto as Property
A People’s Court in China has issued a report affirming the legal status of virtual assets. The report states that virtual assets are considered legal property and are protected by law. While China has imposed a ban on foreign digital assets, the report argues that virtual assets held by individuals should still be considered legal and protected under the current policy framework.
Hot Take: Regulatory Challenges Persist in the Crypto Industry
The recent developments in the crypto industry, including Grayscale’s legal victory and the implementation of the Travel Rule, highlight the ongoing regulatory challenges faced by the sector. While progress is being made, it’s essential for companies to navigate the legal landscape cautiously and be prepared for potential obstacles. The SEC’s actions against NFT offerings and China’s stance on virtual assets further emphasize the need for compliance and regulatory clarity. As the industry continues to evolve, finding a balance between innovation and regulatory compliance will be crucial for its long-term success.
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